The CP deal had CP paying KCS $1 billion if the STB rejected the deal. CP also had to pay a similar amount if they walked away from the deal. I would expect the CN - KCS deal to have similar or slightly larger amounts. So if the CN - KCS deal falls at the STB look for a similar or slightly larger payout to KCS which could then be distributed to its shareholders.
The STB announced today that the Board would consider the CP - KCS deal under the old merger rules dating to 2000, rather than the newer post-2001 rules requiring greater scrutiny and greater analysis of the effect on competition.
STB Announcement
https://www.trains.com/trn/news-reviews/news-wire/report-kansas-city-southern-preparing-to-open-talks-with-canadian-national-over-purchase-bid/
Sounds like KCS is going to enter into talks with CN to merge.
I think CN will win this bidding war. Their offer is superior and they have considerably more resources than CP. At that point CP will be significantly weaker than any class 1 being about half the size of the next biggest. I could see Union Pacific buying CP after that.
In case you hadn't noticed, there have been multiple threads on this since before it was 'officially' announced -- to say nothing of directed pop-up ad propaganda via Kalmbach for the CN offer almost right out of the gate.
ttrraaffiiccI think CN will win this bidding war. Their offer is superior and they have considerably more resources than CP. At that point CP will be significantly weaker than any class 1 being about half the size of the next biggest. I could see Union Pacific buying CP after that.
I think there's a lot of money at stake, every dollar of which will have to be recovered out of "PSR-like economies," at the level CN is proposing. That's getting up into KKR territory... and I still remember the Porsche vs. VW corporate debacle.
Not to be forgotten in a Biden and prospectively Harris Democrat-controlled future is a repeat of corporate flight to Canada a la the original IC acquisition deal or "Tim Horton's" acquiring Burger King. That the 'last men standing' aside from the Buffetts or Solovievs would be Canadian is far from surprising in such context.
Overmod Not to be forgotten in a Biden and prospectively Harris Democrat-controlled future is a repeat of corporate flight to Canada a la the original IC acquisition deal or "Tim Horton's" acquiring Burger King.
Not to be forgotten in a Biden and prospectively Harris Democrat-controlled future is a repeat of corporate flight to Canada a la the original IC acquisition deal or "Tim Horton's" acquiring Burger King.
nanaimo73Brazillians bought Tims and Burger King
Overmod is correct.
The technical term is "corporate inversion".
A larger American corporation merges with a smaller foreign corporation based in a country with favorable corporate income tax rates and favorable capital gains tax rates. The merged company has headquarters in the country with the lower tax rates and often the remaining identity is that of the smaller company based in the country with the better tax rates, while the management personnel running the merged company are the ones coming from the US corporation in the transaction. Generally all earnings from the merged entity, including any net income earned in the United States, gets to be taxed at the lower tax rate of the foreign country.
Restaurant Brands International in Oakville, Ontario is now the corporate entity. They own Tim Hortons, Burger King and Popeyes. I do recall a Brazilian entity taking a large stake in the company.
Another example was Medtronic, the largest medical device maker in the US at the time. They merged with a much smaller Irish firm and moved the corporate HQ to Dublin, Ireland to get lower taxes on net income and avoid the Obamacare medical device tax.
Question regarding KCS access to Omaha.
Does anybody out there know if the access is via trackage rights or haulage rights?
The reason I am asking is because I was looking at the two merger maps again CP-KCS and CN-KCS, and the thought occurred to me that if CN is the winning bidder, if they have trackage rights Omaha-KC, traffic for Iowa grain that is destined for either Gulf ports or Mexico might be able to save some transit time by being routed through Omaha instead of to Chicago.
Please note I am not "rooting" one way or the other and I know that one aspect will not determine who wins out - it is just something that occurred to me as I reviewed information again.
Thank you in advance for any info and thoughts or comments.
kgbw49 Question regarding KCS access to Omaha. Does anybody out there know if the access is via trackage rights or haulage rights? The reason I am asking is because I was looking at the two merger maps again CP-KCS and CN-KCS, and the thought occurred to me that if CN is the winning bidder, if they have trackage rights Omaha-KC, traffic for Iowa grain that is destined for either Gulf ports or Mexico might be able to save some transit time by being routed through Omaha instead of to Chicago. Please note I am not "rooting" one way or the other and I know that one aspect will not determine who wins out - it is just something that occurred to me as I reviewed information again. Thank you in advance for any info and thoughts or comments.
KCS has haulage rights over both UP and BNSF. KCS regularly gets grain trains, using KCS cars and engines, out of the Bartlett elevators in Council Bluffs. I don't know about the south elevator, but all the grain trains coming out of the north elevator go to the KCS.
The trains usually come and go via BNSF, but for a few months every so often trains will go via UP out of the north elevator via Boone and Des Moines to Kansas City. Since it's only for a short period, probably so many trains, I imagine it's to protect the haulage rights over UP. A "use it or lose it" provision.
Interestingly, the north elevator has an exKCS end cab switcher still in KCS white and number.
Jeff
Overmod In case you hadn't noticed, there have been multiple threads on this since before it was 'officially' announced -- to say nothing of directed pop-up ad propaganda via Kalmbach for the CN offer almost right out of the gate. ttrraaffiicc I think CN will win this bidding war. Their offer is superior and they have considerably more resources than CP. At that point CP will be significantly weaker than any class 1 being about half the size of the next biggest. I could see Union Pacific buying CP after that. It will be interesting to see if CP 'counters' the CN offer, or alternatively decides on a proxy fight to limit what it counteroffers (since the CP-KCS deal has the buy-in of both organizations). Irregardless, there's a lot of money at stake to be recovered out of "PSR-like economies" for the kind of money CN is proposing. That's getting up into KKR territory... and I still remember the Porsche vs. VW corporate debacle. Not to be forgotten in a Biden and prospectively Harris Democrat-controlled future is a repeat of corporate flight to Canada a la the original IC acquisition deal or "Tim Horton's" acquiring Burger King. That the 'last men standing' aside from the Buffetts or Solovievs would be Canadian is far from surprising in such context.
ttrraaffiicc I think CN will win this bidding war. Their offer is superior and they have considerably more resources than CP. At that point CP will be significantly weaker than any class 1 being about half the size of the next biggest. I could see Union Pacific buying CP after that.
It will be interesting to see if CP 'counters' the CN offer, or alternatively decides on a proxy fight to limit what it counteroffers (since the CP-KCS deal has the buy-in of both organizations).
Irregardless, there's a lot of money at stake to be recovered out of "PSR-like economies" for the kind of money CN is proposing. That's getting up into KKR territory... and I still remember the Porsche vs. VW corporate debacle.
Thanks to Chris / CopCarSS for my avatar.
Murphy SidingIrregardless? Inconceivable!
That one is always like fingernails on a chalkboard to me. As is also the case when people say "avaidable", which I hear frequently on the local radio.
We don't want to misunderestimate the strategery of CP! :-)
I am still trying to figure out whether it is better to use flammable or inflammable.
I also have not been able to find an alternate word for thesaurus.
English is an awesome language because of its flexibility! In my day job I have to "guesstimate" a lot, which I tell people is an estimate which takes into account measurable factors as well intangible factors such as prior experience and even gut instinct. An example is coming up with an estimate for a construction project.
Convicted OneThat one is always like fingernails on a chalkboard to me.
On the other hand, if it's irritating ... I said I'd take things out that were, and so can do so here. That sentence needed revision for more significant reasons, too.
"Avaidable"? Is that some sort of inadvertent portmanteau between "evadable" and "avoidable"? Or just a malapropism that didn't quite make it to an actual word used wrongly?
There have actually been conversations among language nerds about better words for what a 'thesaurus' is supposed to be. My feeling back in the day is that by parallel construction with 'dictionary' and 'syllabary' it might be "synonymary" or some similar construction. But in actual fact the thing was never done correctly in the first place -- the meaningful thing would be to list all the general synonyms and then clearly indicate the shades of semantic meaning that separate them for proper use in context. What would a good name for that be?
Overmod"Avaidable"? Is that some sort of inadvertent portmanteau between "evadable" and "avoidable"? Or just a malapropism that didn't quite make it to an actual word used wrongly?
I'm not sure, it might be a local malapropism, similar to "warsh", etc. At least that's what I reckon. .
And no, your use of "irregardless" did not in any way offend me, it's just a term that always invokes a "what? did I just hear that?" reaction, similar to some biological sounds in an otherwise quite room.
I suspect the word most folks ar fishing for when they say "irregardless".....is "irrespective"
It's kind of like "flammable" and "inflammable"...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Convicted One Overmod "Avaidable"? Is that some sort of inadvertent portmanteau between "evadable" and "avoidable"? Or just a malapropism that didn't quite make it to an actual word used wrongly? I'm not sure, it might be a local malapropism, similar to "warsh", etc. At least that's what I reckon. . And no, your use of "irregardless" did not in any way offend me, it's just a term that always invokes a "what? did I just hear that?" reaction, similar to some biological sounds in an otherwise quite room. I suspect the word most folks ar fishing for when they say "irregardless".....is "irrespective"
Overmod "Avaidable"? Is that some sort of inadvertent portmanteau between "evadable" and "avoidable"? Or just a malapropism that didn't quite make it to an actual word used wrongly?
All good so long as you're not being irreverent.
On one of these threads, someone provided a link to the KCS/CP proposal that had a bunch of maps. I'm still trying to find that post again to thank him. What I get from the maps is that Kansas City is portrayed as being the funnel point between Canada, the upper midwest, and northeast with Texas and Mexico.
Murphy Siding On one of these threads, someone provided a link to the KCS/CP proposal that had a bunch of maps. I'm still trying to find that post again to thank him. What I get from the maps is that Kansas City is portrayed as being the funnel point between Canada, the upper midwest, and northeast with Texas and Mexico.
What I get from the maps is that Kansas City is portrayed as being the funnel point between Canada, the upper midwest, and northeast with Texas and Mexico.
From what I have read - The STB has approved the CP/KCS under the small transaction standard the STB set in 2001. My belief is that a CN/KCS transaction would be held to the large transaction standards with all the territorial overlap that is involved in that transaction.
Never too old to have a happy childhood!
tree68 It's kind of like "flammable" and "inflammable"...
UlrichAll good so long as you're not being irreverent.
Regardlessly...
mudchickenFlam - Do you or don't you (or are you about to?)
I gave up. Flammable or non flammable only.
CP's response to CN's request brought up something I had forgotten about. Illinois Central had previously tried to acquire Kansas City Southern in 1994 for $1.64 billion. Obviously the attempt failed, mainly because of the uncertainty of the Mega-mergers attempts which would complete in 1995. In that case the STB denied IC the use of a Voting Trust. Interestingly Mr E. Hunter Harrison was CEO of Illinois Central while the CEO of KCS was Mr. Landon Rowland.
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