CP Won't Object to Rival CN Naming David Starling as Trustee in Bid for Kansas City Southern

By Robb M. Stewart

Canadian Pacific Railway Ltd. said it doesn't object to a request by Canadian National Railway Co. to name David Starling as trustee in its rival takeover bid for Kansas City Southern.

CP Monday said Mr. Starling was a good choice as a trustee, which is why it appointed him to the role in its own agreed offer for Kansas City Southern, though it said it didn't address alleged problems in CN's proposed use of a voting trust in its bid.

On Saturday, the Kansas City-based railway said it agreed to negotiate with CN and provide the company with nonpublic information, though it remains bound by the terms of its merger agreement with CP. Its board hasn't ruled that CN's cash and stock offer worth $325 a share is superior to CP's earlier offer, valued at $275 a share, but had determined it could reasonably be expected to lead to a superior proposal.

CN said it has overwhelming support for its plan from more than 400 customers, suppliers, elected officials and others who have filed letters with the Surface Transportation Board in favor of it buying Kansas City Southern. Late last week, CP said 416 shippers and other parties had filed statements with the STB in support of its planned combination with Kansas City Southern.

CN has offered roughly $30 billion for Kansas City Southern, the smallest of the five major freight railroads in the U.S., including $200 in cash and 1.059 CN shares for each Kansas City Southern share. CP has agreed to pay $275 a share, including $90 in cash, in an about $25 billion deal reached last month.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

April 26, 2021 09:31 ET (13:31 GMT)

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