Canadian Pacific Bids Higher for Kansas City Southern
August 10 2021 - 7:55AM
Dow Jones News
By Dave Sebastian
Canadian Pacific Railway Ltd. said it has submitted a higher bid
to buy Kansas City Southern in stock and cash, reigniting a
takeover battle with Canadian National Railway Co. for the coveted
U.S. railroad.
Including the assumption of $3.8 billion in outstanding Kansas
City Southern debt, the offer represents an enterprise value of
about $31 billion, Canadian Pacific said Tuesday. The proposed
transaction values Kansas City Southern at $300 a share,
representing a 34% premium based on Canadian Pacific's closing
price Monday and Kansas City Southern's unaffected closing price on
March 19, Canadian Pacific said.
The Wall Street Journal on Monday reported that the company was
planning to make a new, increased offer for Kansas City
Southern.
Kansas City Southern shareholders would get 2.884 Canadian
Pacific common shares and $90 in cash for each share of Kansas City
Southern common stock held.
Canadian Pacific had clinched a cash-and-stock deal with Kansas
City Southern valued at around $275 a share, or $25 billion. Kansas
City Southern later agreed to a sale to Canadian National instead
after the company offered about $30 billion (then worth around $320
a share) and Canadian Pacific declined to raise its offer.
Kansas City Southern is the smallest of the nation's major
freight railroads. The company plays a big role in U.S.-Mexico
trade, with a network stretching across both countries and
contributing to its desirability as an acquisition target.
Shares of Kansas City Southern rose about 7% to $288.51 and
Canadian Pacific shares fell about 1.7% to $71.50 in premarket
trading.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
August 10, 2021 07:46 ET (11:46 GMT)
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