April 21, 2021 - TRA Newswire -

Kansas City Southern (KCS) now has two suitors looking to gobble up its Midwest rail network that extends into Texas and Mexico. The latest player at the poker table has upped the ante by $50 a KCS share.

Two Canadian rival railroads are engaged in a bidding war for their U.S. cousin, after KCS agreed to a cash and stock transaction sale with one of the them.

KCS announced it has received an unsolicited proposal from Canadian National Railway (CN) to acquire KCS in a cash and stock transaction valued by CN at $325 per KCS share.

On March 21 KCS announced that it had entered into a merger agreement with Canadian Pacific Railway Limited (CP), pursuant to which CP agreed to acquire KCS in a stock and cash transaction valued at $275 per KCS share based on the CP and KCS closing prices on March 19, 2021.

The KCS board of directors will evaluate CN’s proposal in accordance with the terms of KCS’ merger agreement with CP, and will respond in due course. The KCS board of directors has not made any determination with respect to CN’s proposal at this time.

No matter if CP or CN lands up acquiring KCS, it would create the first freight-rail network linking the U.S., Mexico and Canada by connecting ports in the three countries.

The transaction is subject to customary closing conditions including receipt of regulatory approvals and the approval of CP and KCS shareholders.

KCS's Texas network extends from East Texas into the DFW metroplex, down to the Beaumont-Port Arthur petrochemical complex, Houston, Victoria, Corpus Christi in South Texas to Laredo.

‎BofA Securities and Morgan Stanley & Co. LLC are serving as financial advisors to Kansas City Southern. Wachtell, Lipton, Rosen & Katz, Baker & Miller PLLC, Davies Ward Phillips & Vineberg LLP, WilmerHale, and White & Case, S.C. are serving as legal counsel to Kansas City Southern.