Canadian National Confirms Bid for Kansas City Southern
April 20 2021 - 8:00AM
Dow Jones News
By Micah Maidenberg
Canadian National Railway Co. said Tuesday it bid $33.7 billion
in cash and stock to acquire Kansas City Southern, an offer it said
was stronger than the one its Canadian rival offered for the
firm.
Canadian National said its offer values shares of Kansas City
Southern at $325 a share. The Wall Street Journal earlier Tuesday
reported on Canadian National's efforts.
Last month, Canadian Pacific Railway Ltd. agreed to pay $275 a
share, including $90 in cash, for Kansas City Southern, yielding a
bid valued at about $25 billion.
Canadian National said its offer is 21% stronger than the
implied value of the Canadian Pacific deal. Under its offer,
shareholders in Kansas City Southern would receive $200 in cash and
1.059 shares of Canadian National common stock, the latter company
said.
"We firmly believe our proposal is far superior to KCS' existing
agreement with CP because it offers superior financial value over
the immediate and long-term, a more complementary strategic fit,
greater choice and efficiencies for customers and enhanced benefits
for employees and local communities," Canadian National Chairman
Robert Pace said.
Canadian National also said it believes expected earnings before
interest, taxes, depreciation and amortization cost savings would
approach $1 billion annually.
A significant proportion of those savings is "expected from
converting truck traffic from busy interstates and highways for
better fuel efficiency at a lower cost," the railroad said.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
April 20, 2021 07:45 ET (11:45 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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