Kansas City Sud (King Saud University(Terminated merger agreement with Canadian Pacific)CP.TO.Acceptance of a takeover offer from a Canadian citizen)CNR.TO) With the hope of creating a railroad that will pass through Canada, the United States and Mexico.
KCS announced Friday that its board of directors determined that CN shares and the $ 33.6 billion cash offer was a “premium offer” and that it had formally entered into a merger agreement with the railways. As a result, KCS terminated the merger agreement with CP in March and will pay the Calgary Rail Company a $ 700 million infringement fee. The costs will be returned to KCS by CN.
The merger is now facing several regulatory approvals, including from the US Road Transport Board (STB).
CB, which originally offered to merge with KCS in exchange for a $ 25.2 billion bid, said Friday that it will pursue its request for permission to take over KCS if the CN deal fails to elicit regulatory approvals.
The CP consultant wrote in his letter to the STB: “CP believes that the CN cannot prove that the proposed use of the voting box is in the public interest.”
“The CP believes that pursuing its request is in the interest of the KCS and the public so that the CP-KCS’s pro-competition treatment can be reviewed by the Board of Directors and – if the KCS agreement with the CN is terminated or if the CN does otherwise, the KCS cannot be controlled. Likely on KCS by CP without undue delay. ”
Earlier this week The CEO of CN said the company is confident in its ability to overcome regulatory hurdles For a proposed merger with KCS, despite a major shareholder calling for a halt of operations.
Elijah Sikerska is a Senior Correspondent for Yahoo Finance Canada. Follow her on Twitter Embed a Tweet.