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CP Rail still seeking regulatory OK for KCS deal in case CN deal fails

Last Updated May 21, 2021 at 8:30 am MDT

FILE - In this Nov. 5, 2004 file photo, the logo of Kansas City Southern is down on a restored 1954 Kansas City Southern passenger locomotive at Union Station in Kansas City, Mo. A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway. The bid trumps a $25 billion cash-and-stock proposal made by Canadian Pacific last month. Shares of Kansas City Southern jumped more than 18% in Tuesday, April 20, 2021 premarket trading.(Norman Ng/The Kansas City Star via AP)

CALGARY — Canadian Pacific Railway Ltd. says it is still seeking regulatory approval to acquire Kansas City Southern in case the U.S. railway’s deal with rival Canadian National Railway Co. is unable to go ahead.

In a letter to the U.S. Surface Transportation Board, the Calgary-based railway says it intends to proceed with its application seeking authority to acquire KCS, despite being rebuffed by the U.S. railway’s board earlier this month.

CP says doing so will mean that if CN’s deal to acquire Kansas City Southern is terminated or if CN is unable to acquire control, CP will then be ready to go forward with its offer without undue delay.

KCS called off a deal with CP on May 13 after determining that a rival offer by CN was superior. 

However, CP has said that it does not believe the CN deal will win regulatory approval and that it will not engage in a bidding war.

CP chief executive Keith Creel has said that several recent events, including the U.S. Department of Justice’s opposition and the Surface Transportation Board’s decision that stricter merger rules will be used to evaluate CN’s voting trust, are enough for KCS to no longer consider CN’s bid to be superior. 

This report by The Canadian Press was first published May 21, 2021.

Companies in this story: (TSX:CNR, TSX:CP)

The Canadian Press