Benzinga | Aug 10, 2021 09:36AM EDT

Canadian National Makes Statement Related To Deal For Kansas City Southern By Canadian Pacific Rail

CN (TSX:CNR, NYSE:CNI) today issued the following statement regarding CN's proposed, pro-competitive combination with Kansas City Southern (NYSE:KSU) ("KCS") and Canadian Pacific Railway Limited's (TSX:CP, NYSE:CP) ("CP") announcement that it has made another inferior proposal to acquire KCS:

CN and KCS' agreed transaction remains superior and the best option for both companies' stakeholders to deliver on a combination that will enhance competition and provide new servicing options for customers.

On May 21, 2021, CN and KCS announced that they entered into a definitive merger agreement under which KCS shareholders will receive $3251 per common share based on CN's May 13, 2021 offer, which implies a total enterprise value of $33.6 billion, including the assumption of approximately $3.8 billion of KCS debt. Under the terms of that transaction, which was unanimously approved by KCS' board of directors, KCS shareholders will receive $200 in cash and 1.129 shares of CN common stock for each KCS common share, with KCS shareholders expected to own 12.6% of the combined company. CN's proposal delivers an implied premium of 45% to KCS shareholders as well as participation in the significant upside of the combined company. CN's accepted proposal also reflects an 8% premium over CP's latest inferior offer of $300 per share.

CN and KCS' joint voting trust application, which was filed on May 26, 2021, is currently under review by the Surface Transportation Board ("STB"). We await the STB's decision following a comprehensive comment period which resulted in overwhelming support from customers, suppliers, elected officials, organized labor, local communities and other stakeholders. CN and KCS are confident that the voting trust meets all the standards set forth by the STB and believe that, after a fair and thorough review by the STB, it should be approved. KCS shareholders will receive the merger consideration immediately upon the closing of CN's voting trust.

Together, CN and KCS would create the premier railway for the 21st century, connecting ports in the United States, Mexico and Canada to expand North American trade and power economic prosperity. We will continue to take the necessary steps to deliver the many compelling benefits of this transaction to CN and KCS stakeholders.

For more information on CN's pro-competitive combination with KCS, please visit www.ConnectedContinent.com.