This site is protected by reCAPTCHA and the Google
Terms of Service apply.
The Surface Transportation Board (STB) has found that formal board review of the voting trust agreement for use in connection with the proposed transaction between Canadian Pacific Railway and Kansas City Southern Railway is warranted.
In the decision, the board determined that the proposed arrangement is acceptable with certain modifications, STB officials said in a press release.
The decision may be downloaded here.
"Following this critical milestone, we are proceeding full-steam ahead to complete this historic combination, creating the first truly North American single line railroad," said CP President and Chief Executive Officer Keith Creel in a press release. "We are continuing to prepare our formal merger application and proxy filing for a shareholder vote in the near future."
In order to close into a voting trust, the transaction requires approval from shareholders of both companies along with satisfaction of customary closing conditions. CP would then acquire KCS shares and place them into the voting trust, at which point KCS shareholders will receive their consideration, CP officials said.
KCS’ management and board will continue to steward the company while it is in trust, pursuing KCS' independent business plan and growth strategies while the merger undergoes regulatory review, they added. David Starling, former CEO of KCS, has been appointed trustee for the voting trust.
On March 21, CP and KCS entered into a merger agreement under which CP has agreed to acquire KCS for $29 billion in cash and stock.
In response to the STB decision, CN — which has made a competing offer for KCS — issued the following statement:
“CN is encouraged by the STB’s decision today to approve the voting trust for CP’s proposed acquisition of KCS. The STB applied the same public interest factors that CN stated should apply to both voting trusts. “For the reasons given in the STB’s decision, CN is confident that the STB will reach the same decision with respect to the identical voting trust put forward for CN’s proposed acquisition of KCS. Approving both voting trusts will allow KCS to choose the bid it judges to be best for its shareholders.”
Last month, CN made what it characterizes as a “superior proposal” to acquire KCS in a cash-and-stock transaction valued at $33.7 billion, or $325 per share.