(Washington) The battle for US rail company Kansas City Southern (KCS) acquisition continues: The Canadian Pacific Railroad (CP) reassembler will be poised to make a new bid to please KCS from its Canadian rival National (CN), according to for Wall Street Monday newspaper.
The Canadian company’s board of directors met on Monday to approve a bid of about $300 per share, which would value KCS at about $27 billion, according to the newspaper, which cited sources familiar with the matter. It is not clear if this amount includes the company’s $3.8 billion debt.
If it makes this new offer, the Canadian carrier, second in the country for rail freight, will return to try to blow up the US Midwest network of its rival CN, the first Canadian. The latter had himself raised an earlier takeover offer in May and won a merger agreement with KCS at the expense of rival Canadian Pacific, the lead candidate for the acquisition.
The goal of this battle was to create the first railroad linking directly between Canada, the United States, and Mexico, joining Mexican ports and factories with Canadian and American ports and energy resources.
The merger also seeks to capitalize on trade flows generated by the Canada-United States-Mexico Free Trade Agreement (USMCA).
With its 11,000-kilometre network, the sought-after southern city of Kansas City is the smallest of the major railroad companies in the United States. It provides access to the heart of America from Missouri, south of the Corn Belt, where the vast rail network begins that connects farms in the Midwest to ports in the Gulf of Mexico.
KCS shares closed at $269.60 on Monday and were up 5% in post-close electronic trading.
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