CALGARY, AB, Nov. 3, 2021 /CNW/ - Canadian Pacific Railway
Limited (TSX: CP) (NYSE: CP) ("CP") today announced that it has
scheduled a virtual Special Meeting of Shareholders ("Special
Meeting") on Dec. 8, 2021 at 11
a.m. ET (9 a.m. MT) for
shareholders to vote on the issuance of the CP common shares to KCS
stockholders in connection with the proposed business combination
with Kansas City Southern ("KCS").
All shareholders of record of CP common stock as of the close of
business on Nov. 1, 2021 will be
entitled to vote their shares at the Special Meeting.
"We are pleased to ask our shareholders to support this unique,
once-in-a-lifetime partnership to create the first
U.S.-Mexico-Canada rail network," said Keith Creel, CP President and CEO. "This
end-to-end combination is an extraordinary opportunity to inject
new competition and capacity into the U.S. rail network and unlock
new environmentally-friendly transportation options that will grow
the USMCA economy."
As previously announced on Sept. 15,
2021, CP has agreed to acquire KCS in a stock and cash
transaction representing an enterprise value of approximately
USD$31 billion1, which
includes the assumption of $3.8
billion of outstanding KCS debt. The transaction, which has
the unanimous support of both boards of directors, values KCS at
$300 per share, representing a 34%
premium, based on the CP closing price on Aug. 9, 2021, the date prior to which CP
submitted a revised offer to acquire KCS, and KCS' unaffected
closing price on March 19,
2021.2
On Sept. 30, 2021, the Surface
Transportation Board ("STB") confirmed that it approved the use of
a voting trust for the transaction. The conditions to closing into
voting trust include receipt of approval from the shareholders of
both companies along with the satisfaction of other customary
closing conditions, including receipt of Mexican regulatory
approvals.
At the closing, KCS shareholders will receive 2.884 CP shares
and $90 in cash for each KCS common
share held, and KCS's voting shares will be placed into trust. The
companies expect the transaction to close by Q1 2022.
Additional information regarding the combination can be found in
the definitive proxy statement that has been filed with the U.S.
Securities and Exchange Commission ("SEC").
_______________________________
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1 Except
where noted, all figures are in U.S. dollars.
|
2 Based on
KCS closing share price of $224.16 as of March 19, 2021 and CP
closing share price of CAD$91.50 (at 1.2565 FX rate) as of Aug. 9,
2021.
|
Forward-Looking Statements and Information
This news release includes certain forward looking statements
and forward looking information (collectively, FLI) to provide CP
and KCS shareholders and potential investors with information about
CP, KCS and their respective subsidiaries and affiliates, including
each company's management's respective assessment of CP, KCS and
their respective subsidiaries' future plans and operations, which
FLI may not be appropriate for other purposes. 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: the timing and completion of the
transaction, including receipt of regulatory and shareholder
approvals and the satisfaction of other conditions precedent;
interloper risk; the realization of anticipated benefits and
synergies of the transaction and the timing thereof; the success of
integration plans; the focus of management time and attention on
the transaction and other disruptions arising from the transaction;
changes in business strategy 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 which may
negatively impact the value of consideration offered to KCS
shareholders; the ability of management of CP, its subsidiaries and
affiliates to execute key priorities, including those in connection
with the transaction; general Canadian, U.S., Mexican 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,
the U.S. and Mexico; 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; 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 budgeted capital
expenditures in carrying out business plans; services and
infrastructure; the satisfaction by third parties of their
obligations; 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,
the U.S. and Mexico; climate
change and the market and regulatory responses to climate change;
ability to achieve commitments and aspirations relating to reducing
greenhouse gas emissions and other climate-related objectives;
anticipated in-service dates; success of hedging activities;
operational performance and reliability; customer, shareholder,
regulatory and other stakeholder approvals and support; regulatory
and legislative decisions and actions; the adverse impact of any
termination or revocation by the Mexican government of Kansas City
Southern de Mexico, S.A. de C.V.'s
Concession; 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; material adverse changes in economic and industry
conditions, including the availability of short and long-term
financing; and the pandemic created by the outbreak of COVID-19 and
its variants, and 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 and KCS with Canadian and U.S.
securities regulators, including any proxy statement, prospectus,
material change report, management information circular or
registration statement to be filed in connection with the
transaction. 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 and KCS'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.
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
About KCS
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.
Additional Information About the Transaction and Where to
Find It
CP has filed with the SEC a registration statement on Form F-4,
which includes a proxy statement of KCS that also constitutes a
prospectus of CP. The registration statement has been declared
effective. CP 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. CP will also file a management proxy
circular in connection with the transaction with applicable
securities regulators in Canada
and the management proxy circular will be sent to CP shareholders.
INVESTORS, STOCKHOLDERS AND SHAREHOLDERS OF KCS AND CP ARE URGED TO
READ THE PROXY STATEMENT/PROSPECTUS, AND MANAGEMENT PROXY CIRCULAR,
AS APPLICABLE, AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH
THE SEC OR APPLICABLE SECURITIES REGULATORS IN CANADA IN CONNECTION WITH THE TRANSACTION WHEN
THEY BECOME AVAILABLE (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS
THERETO), AS THEY CONTAIN AND WILL CONTAIN IMPORTANT INFORMATION
ABOUT KCS, CP, THE TRANSACTION AND RELATED MATTERS. The
registration statement and proxy statement/prospectus and other
documents filed by CP and KCS with the SEC, when filed, will be
available free of charge at the SEC's website at www.sec.gov. In
addition, investors and shareholders will be able to obtain free
copies of the registration statement, proxy statement/prospectus,
management proxy circular and other documents which have been or
will be filed with the SEC and applicable securities regulators in
Canada by CP online at
investor.cpr.ca and www.sedar.com, upon written request delivered
to CP at 7550 Ogden Dale Road S.E., Calgary, Alberta, T2C 4X9, Attention: Office
of the Corporate Secretary, or by calling CP at 1-403-319-7000, and
will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by KCS
online 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's Corporate Secretary's
Office by telephone at 1-888-800-3690 or by email at
corpsec@kcsouthern.com.
You may also read and copy any reports, statements and other
information filed by KCS and CP with the SEC at the SEC public
reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at
1-800-732-0330 or visit the SEC's website for further information
on its public reference room. 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.
Participants in the Solicitation of Proxies
This news release is not a solicitation of proxies in connection
with the transaction. However, under SEC rules, CP, KCS, and
certain of their respective directors and executive officers may be
deemed to be participants in the solicitation of proxies in
connection with the transaction. Information about CP's directors
and executive officers may be found in its 2021 Management Proxy
Circular, dated March 10, 2021, as
well as its 2020 Annual Report on Form 10-K filed with the SEC and
applicable securities regulators in Canada on Feb. 18,
2021, available on its website at investor.cpr.ca and
at www.sedar.com and www.sec.gov. Information about KCS's 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 Jan. 29, 2021,
available at www.investors.kcsouthern.com and www.sec.gov. These
documents can be obtained free of charge from the sources indicated
above. Additional information regarding the interests of such
potential participants in the solicitation of proxies in connection
with the transaction are included in the proxy
statement/prospectus, management proxy circular and other relevant
materials filed or to be filed with the SEC and applicable
securities regulators in Canada
when they become available.
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SOURCE Canadian Pacific