There are a number of recent significant developments in the competing proposals of CN and CP to merge with KCS.
The main developments since the last update are as follows.
- May 13: KCS Board announces intention to accept CN offer in place of CP
- May 14: U.S. Department of Justice (JOC), in a submission to the STB, opposes permitting a voting trust to CN related JOC competition concerns
- May 17: Report that STB confirms more rigorous post 2001 evaluation will be used in the CN/KCS proposed merger. Also CN application for a voting trust comparable to that granted to CP was denied by the STB
- May 18: UK-based investment firm TCI, a large shareholder in both CN and CP, has written to the CN management advising them “to end this ill-advised adventure”
- May 21: CP announces no counteroffer to KCS and it will prepare and file its application to the STB to take control of KCS
- May 21: CN and KCS announce their proposed merger agreement
With both mergers in play and with CP granted a voting trust, but not CN, and with a significant CN shareholder (who is also a CP shareholder) expressing opposition to CN pursuing this merger, it will not be clear for some time what will be the final resolution.
The May 20th report from Freightwaves provides an overview of the current situation and can be found by clicking on the first link below.
The TCI letter to the Board Chair of CN can be found at the second link below.
The May 21 report from Progressive Railroading, providing late breaking information can be found at the third link below.