(Toronto) Kansas City Southern (KCS) is postponing shareholder vote on the Canadian National Railway Company (CN) takeover bid to Sept. 3 as it continues to wait for a regulator American votes on a key voting trust.
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The vote was scheduled for Thursday, but the U.S. railroad said it would wait for the U.S. Surface Transportation Board (STB) decision before holding the vote.
The US rail regulator has said it plans to issue its decision on the voting trust by the end of August.
The trust would allow KCS to remain independent while a full review of the transaction is carried out, but would allow shareholders to be paid without having to wait for a final decision on the transaction.
“The KCS and CN are confident that the voting trust meets all the standards and public interest test set by the STB and believe it should be approved,” KCS said in a statement.
KCS Board of Directors supports CN’s proposal over a competing offer from Canadian Pacific Railway (CP).
CN’s offer is valued at US $ 33.6 billion, while CP has made an offer valued at US $ 31 billion. Both proposals include assuming approximately US $ 3.8 billion in debt from KCS.
However, CP, which has already gained approval to use a voting trust, insisted its offer carries less risk to shareholders because it is more likely to be approved by regulators.
“A CP-KCS merger would create more competition – not less – in the rail freight industry and be better for Amtrak,” CP said in a statement Thursday.
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