April 20, 2021 | Industrials | North America | Ended

Kansas City Southern / Canadian National Railway: New Deal Insights

Exactly one month after KSU entered into a definitive agreement to be acquired by Canadian Pacific, rival Canadian National (“CN”) unexpectedly gate-crashed the transaction with an unsolicited, competing cash and stock offer. At the time, CN’s counterbid was worth $325 per KSU share, a 21% premium to CP’s cash and stock bid, and is currently worth $315 per share. The latest offer is a healthy 45% premium to KSU’s undisturbed price on 19-Mar-21 and, if accepted, would result in KSU shareholders owning just 12% of the enlarged CN. KSU preferred shareholders will ... Deal risks assessed in this research report: • Complaints that cause regulators to hesitate on the voting trust • Competing bids disappear

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