https://prod.stb.gov/news-communications/latest-news/pr-21-37/
For the PDF version, go here
https://prod.stb.gov/wp-content/uploads/PR-21-37.pdf
and click the blue highlighted link at the end.
Can't say I am surprised.
Never too old to have a happy childhood!
I particularly like the part where the STB affirms that it is not their duty to serve the "transactional preferences of KCS shareholders"
Not surprised given the public comments from STB head Oberman all along. The only thing that surprises about this is that some people are surprised by this decision.
So what happens now? Is the CN takeover of KCS dead and will this give CP a better chance at a merger?
caldreamer So what happens now? Is the CN takeover of KCS dead and will this give CP a better chance at a merger?
CN may still continue with its merger application pending the outcome of the KCS shareholder vote on Friday. Or..they may decide to throw in the towel and ante up the 1 billion dollar breakup fee (which is in addition to the 700 million they already paid to cover the breakup fee with CP. CP could continue on with its interest in KCS, and if any merger can be approved, that one would have the best shot at success. Personally I think both CN and CP should call it a day on this and perhaps focus on improving their existing plant.
The STB rejecting the voting trust also opens up other possible parties interested in KCS.
Or best option of all, KCS remains an independent entity that would retain its ability to enter into operating and marketing agreements with any of the other larger systems.
Ulrich:
I whole hardily agree with your option.
We should know more on Friday 9/3/2021
Get ready for bright red Canadian Pacific de Mexico locomotives. The bar to clear for a merger under the pre-2001 rules is much lower, and the STB said those rules will govern a CP-KCS transaction.
kgbw49Get ready for bright red Canadian Pacific de Mexico locomotives. The bar to clear for a merger under the pre-2001 rules is much lower, and the STB said those rules will govern a CP-KCS transaction.
Yes, though NYSE thinks CP is paying too much for KCS and that the CN offer was way North of fair price.
If I were CN I would walk away at this point even though it means handing over another Billion dollars to CP. I think CP about funded their offer increase partly with the CN payouts. Still CP is about $4-5 Billion in the hole with the offer increase and it appears from it's fall in price that NYSE is not happy with that.
kgbw49 Get ready for bright red Canadian Pacific de Mexico locomotives. The bar to clear for a merger under the pre-2001 rules is much lower, and the STB said those rules will govern a CP-KCS transaction.
Not necessarily.. A CN-KCS merger can still happen. When shareholders vote this Friday we will know what the future holds. They will have to re-negotiate a new merger agreement if they want to continue down the path.
SD60MAC9500 Not necessarily.. A CN-KCS merger can still happen. When shareholders vote this Friday we will know what the future holds. They will have to re-negotiate an new merger agreement if they want to continue down the path.
Not necessarily.. A CN-KCS merger can still happen. When shareholders vote this Friday we will know what the future holds. They will have to re-negotiate an new merger agreement if they want to continue down the path.
Investors at CN are calling for "regime change" at the top Of CN.
At CP, there is not that same dynamic. In fact the Board extended Keith Creel's contract specifically so he could stay on to oversee the combining of the two systems.
Get out the popcorn!
What was the outcome of the KCS special shareholders meeting last Friday. Have not heard anything.
caldreamerWhat was the outcome of the KCS special shareholders meeting last Friday. Have not heard anything.
They put off making any decision until the 24th, I think - I could be wrong on the date.
Checked the KCS website and there was not date as to when they may hold a shareholders meeting. The board of directors are looking at there options including a possible increase in the offer from CP. I would not be suprised if the STB rejection of the CN voting trust was involved in there decision.
caldreamer Checked the KCS website and there was not date as to when they may hold a shareholders meeting. The board of directors are looking at there options including a possible increase in the offer from CP. I would not be suprised if the STB rejection of the CN voting trust was involved in there decision.
Hopefully both CN and CP cut their losses and forget about this merger. Same customer benefits can be attained simply by working together... no expensive legacy building mergers required.
Ulrich caldreamer Checked the KCS website and there was not date as to when they may hold a shareholders meeting. The board of directors are looking at there options including a possible increase in the offer from CP. I would not be suprised if the STB rejection of the CN voting trust was involved in there decision. Hopefully both CN and CP cut their losses and forget about this merger. Same customer benefits can be attained simply by working together... no expensive legacy building mergers required.
caldreamer
The whole thing is a big waste of time and money.
Unless they can win, CN will be the big looser. If they back out of the merger or the if it is killed by the STB they have to pay KCS $1,000,000,000 (One Billion) dollars.
caldreamerUnless they can win, CN will be the big looser. If they back out of the merger or the if it is killed by the STB they have to pay KCS $1,000,000,000 (One Billion) dollars.
US or Canadian?
The announcement of the terms did not state, but since the termination penalty is going to a US carrier it is most likely in US dollars.
If KCS' board accepts CP's bid, CN presumably would owe KCS nothing since it would be KCS calling it off. Given the Chris Hohn / TCI food fight that's firing up at CN, I'd be surprised if they challenged KCS should they accept CP's bid. Makes far more sense for CN to walk away and declare war against TCI.
CW
KCS declares CP bid Superior
https://www.progressiverailroading.com/kansas_city_southern/news/BREAKING-NEWS-KCS-declares-CP-proposal-superior-will-terminate-CN-deal--64600
About this time next year we'll be seeing bright red Canadian Pacific de Mexico locomotives.
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