Calgary, AB — Canadian Pacific Railway Limited on Monday said the Surface Transportation Board's (STB) decision to refuse Canadian National and Kansas City Southern's joint motion for voting trust approval is the right one for rail shippers, the freight rail industry and the North American economy.
"The STB decision clearly shows that the CN-KCS merger proposal is illusory and not achievable," said Keith Creel, CP president and CEO, in a statement released Monday.
"Knowing this, we believe the August 10 CP offer to combine with KCS, which recognizes the premium value of KCS while providing regulatory certainty, ought to be deemed a superior proposal.
"Today, we have notified the KCS Board of Directors that our August 10 offer still stands to bring this once-in-a lifetime partnership together."
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The text of the letter to the KCS Board of Directors can be found below in this news release.
"CP has always maintained that the CN-KCS combination and the proposed CN voting trust is not in the public interest," Creel said.
"Hundreds of rail shippers, community leaders, elected officials and other stakeholders have voiced those same concerns and today the STB agreed."
As previously announced, CP continues to pursue its application process for a potential acquisition of KCS so that the STB can review the CP-KCS combination.
Importantly, the STB has already approved CP's use of a voting trust and affirmed KCS' waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is end-to-end, pro-competitive, and the only viable Class 1 combination, CP said in the news release.
KCS stockholder meeting Sept. 3
CP has filed a proxy statement asking stockholders to vote "AGAINST" the proposed CN-KCS combination at the KCS stockholders meeting so that KCS stockholders are not locked into the CN-KCS deal and unable to consider other, better, options.
That includes CP's Aug. 10 offer submitted to KCS. A vote to "ABSTAIN" and vote "AGAINST" are essentially the same since they both withhold approval of the CN merger proposal.
To read the full news release, click here.
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