KCS Board Rightly Says Stockholders Should
Have Benefit of the STB Decision to Make an Informed Decision and
Be Able to Consider Alternative Proposals
CP Offer Provides Greater Regulatory and Value
Certainty
CALGARY, AB, Aug. 12, 2021 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) ("CP") today issued the
following statement on the announcement by the Kansas City Southern
("KCS") Board of Directors that it will adjourn its scheduled
Aug. 19 special meeting of
stockholders if the Surface Transportation Board ("STB") has not
ruled on Canadian National Railway Company's ("CN") trust proposal
by Aug. 17, 2021.
We applaud the KCS Board of Directors' decision to adjourn the
Aug. 19 stockholder meeting absent a
decision from the STB to "give all shareholders and the Board time
to receive and consider the STB decision."
CP has always maintained KCS stockholders should have all
relevant information, including the STB decision on the CN voting
trust, to be able to make an informed decision, avoid being
locked into the CN-KCS deal and preserve the ability to
consider a better alternative proposal. The only way for
shareholders to ensure they preserve that ability is to vote
"AGAINST" the proposed CN-KCS merger and "FOR" adjournment leading
up to the proposed adjournment date of Aug.
17.
We are confident that the STB will take the time needed to
review the myriad of issues and concerns the CN voting trust
raises. We continue to believe that CN's proposed use of a voting
trust should not be approved because it is anti-competitive and not
in the public interest.
We believe that once the STB rules on the CN voting trust, the
Aug. 10 CP offer will be deemed
superior as the CP-KCS combination has regulatory certainty with
the STB approval for the use of a voting trust.
CP has filed a proxy statement asking stockholders to vote
"AGAINST" the proposed CN-KCS combination at the Aug. 19 KCS special meeting of stockholders so
that KCS's stockholders are not locked into the CN-KCS deal and
unable to consider other, better, options, including CP's
Aug. 10 proposal.
CP-KCS: The only viable Class 1 combination
A CP-KCS
combination would be a positive step toward more competition – not
less – in the freight rail industry and would be better for Amtrak.
It brings more competition among railways and protects obligations
to passenger service.
For information on the benefits of a CP-KCS combination, visit
FutureForFreight.com.
FORWARD LOOKING STATEMENTS AND INFORMATION
This news
release includes certain forward-looking statements and forward
looking information (collectively, FLI). FLI is typically
identified by words such as "anticipate", "expect", "project",
"estimate", "forecast", "plan", "intend", "target", "believe",
"likely" and similar words suggesting future outcomes or statements
regarding an outlook. All statements other than statements of
historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its
nature, FLI involves a variety of assumptions, which are based
upon factors that may be difficult to predict and that may involve
known and unknown risks and uncertainties and other factors which
may cause actual results, levels of activity and achievements to
differ materially from those expressed or implied by these FLI,
including, but not limited to, the following: changes in business
strategies and strategic opportunities; estimated future dividends;
financial strength and flexibility; debt and equity market
conditions, including the ability to access capital markets on
favourable terms or at all; cost of debt and equity capital;
potential changes in the CP share price; the ability of management
of CP, its subsidiaries and affiliates to execute key priorities;
general North American and global social, economic, political,
credit and business conditions; risks associated with agricultural
production such as weather conditions and insect populations;
the availability and price of energy commodities; the effects
of competition and pricing pressures, including competition from
other rail carriers, trucking companies and maritime shippers in
Canada and the U.S.; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped via CP; inflation; geopolitical instability; changes in
laws, regulations and government policies, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; changes in fuel prices; disruption
in fuel supplies; uncertainties of investigations, proceedings or
other types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of CP's budgeted capital
expenditures in carrying out CP's business plan; services and
infrastructure; the satisfaction by third parties of their
obligations to CP; currency and interest rate fluctuations;
exchange rates; effects of changes in market conditions and
discount rates on the financial position of pension plans and
investments; trade restrictions or other changes to international
trade arrangements; the effects of current and future multinational
trade agreements on the level of trade among Canada and the U.S.; climate change and the
market and regulatory responses to climate change; anticipated
in-service dates; success of hedging activities; operational
performance and reliability; regulatory and legislative decisions
and actions; public opinion; various events that could disrupt
operations, including severe weather, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; and the pandemic created by the outbreak of COVID-19
and resulting effects on CP's business, operating results, cash
flows and/or financial condition, as well as resulting effects on
economic conditions, the demand environment for logistics
requirements and energy prices, restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions, and
disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be
found in reports and filings by CP with Canadian and U.S.
securities regulators. Reference should be made to "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Statements" in CP's
annual and interim reports on Form 10-K and 10-Q. Due to the
interdependencies and correlation of these factors, as well as
other factors, the impact of any one assumption, risk or
uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
CP has
filed a definitive proxy statement with the Securities and Exchange
Commission ("SEC") to be used to solicit votes of the stockholders
of KCS against the proposal to adopt the CN Agreement.
Additionally, in furtherance of CP's proposed transaction with KCS
and subject to future developments, CP (and, if a negotiated
transaction is agreed, KCS) may file one or more proxy statements,
registration statements, prospectuses or other documents with the
SEC or applicable securities regulators in Canada. This news release is not a substitute
for any proxy statement, registration statement, prospectus or
other document CP and/or KCS may file with the SEC or applicable
securities regulators in Canada in
connection with the proposed transaction.
INVESTORS AND STOCKOLDERS OF KCS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT, ALONG WITH ANY FUTURE PROXY
STATEMENT(S) AND OTHER PROXY MATERIALS, REGISTRATION STATEMENT(S),
PROSPECTUS(ES) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC
OR APPLICABLE SECURITIES REGULATORS IN CANADA CAREFULLY IN THEIR ENTIRETY IF AND WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT KCS, CP, THE TRANSACTIONS CONTEMPLATED BY THE CN
MERGER AGREEMENT, CP'S PROPOSED TRANSACTION WITH KCS AND RELATED
MATTERS AND DEVELOPMENTS. THE DEFINITIVE PROXY STATEMENT
ALSO INCLUDES INFORMATION ABOUT THE IDENTITY OF THE PARTICIPANTS IN
CP'S PROXY SOLICITATION AND A DESCRIPTION OF THEIR DIRECT OR
INDIRECT INTERESTS THEREIN.
THE DEFINITIVE PROXY STATEMENT AND OTHER MATERIALS FILED WITH
THE SEC ARE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
WWW.SEC.GOV. IN ADDITION, INVESTORS AND STOCKHOLDERS MAY
OBTAIN FREE COPIES OF THE DEFINITIVE PROXY STATEMENT AND OTHER
MATERIALS FILED WITH THE SEC ONLINE AT INVESTOR.CPR.CA, OR UPON
REQUEST TO CP'S PROXY SOLICITOR, INNISFREE M&A INCORPORATED, AT (212)
750-5833 OR TOLL-FREE AT (877) 456-3442.
NO OFFER OR SOLICITATION
This news release shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to appropriate registration or qualification under
the securities laws of such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as
amended.
ABOUT CANADIAN PACIFIC
Canadian Pacific (TSX: CP)
(NYSE: CP) is a transcontinental railway in Canada and the
United States with direct links to major ports on the west
and east coasts. CP provides North American customers a competitive
rail service with access to key markets in every corner of the
globe. CP is growing with its customers, offering a suite of
freight transportation services, logistics solutions and supply
chain expertise. Visit www.cpr.ca to see the rail advantages of CP.
CP-IR
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SOURCE Canadian Pacific