Recommends Shareholders Vote “FOR” Merger
Agreement With CN
Kansas City Southern (NYSE: KSU) (“KCS”) today issued the
following statement in response to Canadian Pacific Railway
Limited’s (TSX: CP) (NYSE: CP) ("CP") filing of a preliminary proxy
statement on July 29, 2021 regarding the Company’s proposed
combination with CN (TSX: CNR, NYSE: CNI), announced on May 21,
2021:
CP’s filing of a preliminary proxy seeking
votes against the CN transaction is part of an effort to defeat a
transaction that offers KCS shareholders $50 per share more than CP
was willing to offer. In May, CP decided not to take advantage of
its five-business-day match right, per the terms of its initial
merger contract, to compete with CN’s superior proposal. Since that
time, CP has consistently criticized our combination with CN. CP
claims in its latest filing that it is, “ready to re-engage with
KCS,” but it did not make any new proposal in its most recent
filing. Nor did it commit to making one in the future, going on to
say, “there can be no assurances that Canadian Pacific will make an
offer or proposal to KCS.”
KCS believes that shareholders should focus
on the opportunity to receive a value under the CN combination of
$325 per share, compared to CP’s now terminated offer of $275 per
share. We believe that CP’s recommendation to vote against our
combination with CN is not in our shareholders’ interest.
Shareholder approval of the CN transaction best positions KCS to
deliver superior value to our shareholders as soon as possible.
We continue to recommend that our
shareholders vote “FOR” the combination with CN, which has
compelling benefits for all stakeholders including notably, our
customers. Together with CN, we will create the premier railway for
the 21st century, bringing together highly complementary networks
to benefit customers, enhancing industry competition, and
delivering significant value to shareholders immediately upon close
of CN’s voting trust.
KCS’ definitive proxy materials can be found on the SEC’s
website at www.sec.gov. The proxy materials have been mailed to all
shareholders eligible to vote at the Special Meeting, which can be
accessed at meetings.computershare.com/MUKQC2H.
KCS shareholders who need assistance or have questions regarding
the KCS Special Meeting may contact KCS’s proxy solicitor:
If you have any questions,
require assistance with voting your proxy card,
or need additional copies of
proxy material, please call MacKenzie Partners
at the phone numbers listed
below.
MacKenzie Partners,
Inc.
1407 Broadway, 27th Floor
New York, NY 10018
email:
KSU@mackenziepartners.com
(212) 929-5500 or (800)
322-2885
For more information on CN’s combination with KCS, please visit
www.ConnectedContinent.com.
About Kansas City Southern
Headquartered in Kansas City, Mo., Kansas City Southern (KCS)
(NYSE: KSU) is a transportation holding company that has railroad
investments in the U.S., Mexico and Panama. Its primary U.S.
holding is The Kansas City Southern Railway Company, serving the
central and south central U.S. Its international holdings include
Kansas City Southern de Mexico, S.A. de C.V., serving northeastern
and central Mexico and the port cities of Lázaro Cárdenas, Tampico
and Veracruz, and a 50 percent interest in Panama Canal Railway
Company, providing ocean-to-ocean freight and passenger service
along the Panama Canal. KCS' North American rail holdings and
strategic alliances with other North American rail partners are
primary components of a unique railway system, linking the
commercial and industrial centers of the U.S., Mexico and Canada.
More information about KCS can be found at www.kcsouthern.com
Forward-Looking Statements
Certain statements included in this news release constitute
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and under
Canadian securities laws, including statements based on
management’s assessment and assumptions and publicly available
information with respect to KCS, regarding the proposed transaction
between CN and KCS, the expected benefits of the proposed
transaction and future opportunities for the combined company. By
their nature, forward-looking statements involve risks,
uncertainties and assumptions. CN and KCS caution that their
assumptions may not materialize and that current economic
conditions render such assumptions, although reasonable at the time
they were made, subject to greater uncertainty. Forward-looking
statements may be identified by the use of terminology such as
“believes,” “expects,” “anticipates,” “assumes,” “outlook,”
“plans,” “targets,” or other similar words.
Forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and other factors
which may cause actual results, performance or achievements of CN,
or the combined company, to be materially different from the
outlook or any future results, performance or achievements implied
by such statements. Accordingly, readers are advised not to place
undue reliance on forward-looking statements. Important risk
factors that could affect the forward-looking statements in this
news release include, but are not limited to: the outcome of the
proposed transaction between CN and KCS; the parties’ ability to
consummate the proposed transaction; the conditions to the
completion of the proposed transaction; that the regulatory
approvals required for the proposed transaction may not be obtained
on the terms expected or on the anticipated schedule or at all;
CN’s indebtedness, including the substantial indebtedness CN
expects to incur and assume in connection with the proposed
transaction and the need to generate sufficient cash flows to
service and repay such debt; CN’s ability to meet expectations
regarding the timing, completion and accounting and tax treatments
of the proposed transaction; the possibility that CN may be unable
to achieve expected synergies and operating efficiencies within the
expected time-frames or at all and to successfully integrate KCS’
operations with those of CN; that such integration may be more
difficult, time-consuming or costly than expected; that operating
costs, customer loss and business disruption (including, without
limitation, difficulties in maintaining relationships with
employees, customers or suppliers) may be greater than expected
following the proposed transaction or the public announcement of
the proposed transaction; the retention of certain key employees of
KCS may be difficult; the duration and effects of the COVID-19
pandemic, general economic and business conditions, particularly in
the context of the COVID-19 pandemic; industry competition;
inflation, currency and interest rate fluctuations; changes in fuel
prices; legislative and/or regulatory developments; compliance with
environmental laws and regulations; actions by regulators; the
adverse impact of any termination or revocation by the Mexican
government of KCS de México, S.A. de C.V.’s Concession; increases
in maintenance and operating costs; security threats; reliance on
technology and related cybersecurity risk; trade restrictions or
other changes to international trade arrangements; transportation
of hazardous materials; various events which could disrupt
operations, including illegal blockades of rail networks, and
natural events such as severe weather, droughts, fires, floods and
earthquakes; climate change; labor negotiations and disruptions;
environmental claims; uncertainties of investigations, proceedings
or other types of claims and litigation; risks and liabilities
arising from derailments; timing and completion of capital
programs; and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the United
States. Reference should also be made to Management’s Discussion
and Analysis in CN’s annual and interim reports, Annual Information
Form and Form 40-F, filed with Canadian and U.S. securities
regulators and available on CN’s website, for a description of
major risk factors relating to CN. Additional risks that may affect
KCS’ results of operations appear in Part I, Item 1A “Risks Related
to KCS’ Operations and Business” of KCS’ Annual Report on Form 10-K
for the year ended December 31, 2020, and in KCS’ other filings
with the U.S. Securities and Exchange Commission (“SEC”).
Forward-looking statements reflect information as of the date on
which they are made. CN and KCS assume no obligation to update or
revise forward-looking statements to reflect future events, changes
in circumstances, or changes in beliefs, unless required by
applicable securities laws. In the event CN or KCS does update any
forward-looking statement, no inference should be made that CN or
KCS will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
No Offer or Solicitation
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Additional Information and Where to Find It
In connection with the proposed transaction, CN has filed with
the SEC a registration statement on Form F-4 to register the shares
to be issued in connection with the proposed transaction, and the
registration statement has been declared effective. CN has filed
with the SEC its prospectus and KCS has filed with the SEC its
definitive proxy statement in connection with the proposed
transaction, and the KCS proxy statement is being sent to the
stockholders of KCS seeking their approval of the merger-related
proposals. This news release is not a substitute for the
registration statement, the prospectus, the proxy statement or
other documents CN and/or KCS may file with the SEC or applicable
securities regulators in Canada in connection with the proposed
transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, THE PROSPECTUS, THE PROXY STATEMENT 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 (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) BECAUSE THEY CONTAIN AND WILL CONTAIN
IMPORTANT INFORMATION ABOUT CN, KCS AND THE PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these documents
(if and when available) and other documents filed with the SEC and
applicable securities regulators in Canada by CN free of charge
through at www.sec.gov and www.sedar.com. Copies of the documents
filed by CN (if and when available) will also be made available
free of charge by accessing CN’s website at www.CN.ca. Copies of
the documents filed by KCS (if and when available) will also be
made available free of charge at www.investors.kcsouthern.com, upon
written request delivered to KCS at 427 West 12th Street, Kansas
City, Missouri 64105, Attention: Corporate Secretary, or by calling
KCS’ Corporate Secretary’s Office by telephone at 1-888-800-3690 or
by email at corpsec@kcsouthern.com.
Participants
This news release is neither a solicitation of a proxy nor a
substitute for the registration statement, the prospectus, the
proxy statement or other filings that may be made with the SEC and
applicable securities regulators in Canada. Nonetheless, CN, KCS,
and certain of their directors and executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about CN’s executive officers and
directors is available in its 2021 Management Information Circular,
dated March 9, 2021, as well as its 2020 Annual Report on Form 40-F
filed with the SEC on February 1, 2021, in each case available on
its website at www.CN.ca/investors/ and at www.sec.gov and
www.sedar.com. Information about KCS’ directors and executive
officers may be found on its website at www.kcsouthern.com and in
its 2020 Annual Report on Form 10-K filed with the SEC on January
29, 2021, available at www.investors.kcsouthern.com and
www.sec.gov. Additional information regarding the interests of such
potential participants is or may be included in the registration
statement, the prospectus, the proxy statement or other documents
filed with the SEC and applicable securities regulators in Canada
if and when they become available. These documents (if and when
available) may be obtained free of charge from the SEC’s website at
www.sec.gov and from www.sedar.com, as applicable.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210802005211/en/
Media C. Doniele Carlson KCS
Corporate Communications & Community Affairs (816) 983-1372
dcarlson@kcsouthern.com
Joele Frank, Wilkinson Brimmer Katcher Tim Lynch / Ed Trissel
(212) 355-4449
Investment Community Ashley
Thorne Vice President Investor Relations (816) 983-1530
athorne@kcsouthern.com
MacKenzie Partners, Inc. Dan Burch / Laurie Connell (212)
929-5748 / (212) 378-7071 dburch@mackenziepartners.com
lconnell@mackenziepartners.com
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