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Canadian Pacific yesterday announced it filed a proxy statement asking Kansas City Southern shareholders to vote against the proposed CN-KCS combination at KCS' special meeting of stockholders scheduled on Aug. 19.
CP is asking stockholders to vote against the proposed combination so that CN's proposed acquisition can be decided at a later date, when more information will be available to KCS stockholders.
"CP has always said it wanted to do a friendly deal with KCS and that remains true," said CP President and Chief Executive Officer Keith Creel in a press release. "CP would have preferred not to appeal directly to KCS's stockholders, but given the impending vote on CN's proposal, we believe we have no choice. What we are doing here is simply contesting the vote on the CN-KCS proposal because a 'yes' vote now would lock KCS stockholders in until February 2022, instead of their being free to consider other, better, options.”
CP wants to ensure that KCS stockholders are aware that a vote “without the benefit of an STB decision on the CN voting trust proposal and without a chance to consider other proposals until the spring of next year, would not be in their best interests," Creel added.
CP maintains that its proposed merger with KCS “remains the only viable Class I combination,” according to the release. The STB has already approved CP’s use of a voting trust and affirmed KCS's waiver form the new rail merger rules it adopted in 2001 "because a CP-KCS combination is truly end-to-end, pro-competitive, and the only viable Class I combination," they said.