CP to Buy KCS

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MQT1223
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Re: CP to Buy KCS

Unread post by MQT1223 »

DaveO wrote:
Wed Sep 01, 2021 8:47 pm
Don't forget that as a publicly owned company traded on the stock markets, the Board of Directors of KCS has a fiduciary duty to accept the best deal for the shareholders.

If CP wants to get a quick approval, then they better get their offer up where CN had theirs.
That would make it easier for the BOD to endorse it.

As a side note, that fiduciary duty also applies to pension boards. That results sometimes in employee pension boards voting for a takeover of their company that results in many, sometimes all, employees losing their jobs.
Shouldn't have been hard to figure out that CN wasn't going to succeed. Best deal for their stockholders, they should've took note that a CP-KCS merger was exempt from the current merger regulations. That to me says its a guaranteed green light for merger. Everyone would've been paid and been happy.
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DaveO
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Re: CP to Buy KCS

Unread post by DaveO »

What you are saying is logical but that's not how fiduciary duty always works.
A KCS shareholder can sue the KCS BOD if they don't maximize the return to the KCS shareholders.

I'm pretty sure KCS has some "activist" shareholders.
The type that has lawyers and can afford to sue if the BOD doesn't make CP sweeten the deal.

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Doktor No
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Re: CP to Buy KCS

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GET VACCINATED!

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Saturnalia
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Re: CP to Buy KCS

Unread post by Saturnalia »

Whether the outcome is a CN takeover, CP takeover or no deal, CN is a winner. I think this aspect is being overlooked.

If CN gets to takeover KCS (obviously this option is no longer on the table), they expand the franchise and keep CP out off the field in the mid-south and Mexico.

If CP gets the takeover, CN’s bid means CP will pay a lot more than originally envisioned. One of the top rules in mergers and acquisitions is don’t let your competitor have it for cheap. Similar logic was involved in the first round of Conrail and CSX vs NS. If you can’t have it, make your competitor bleed cash as much as possible.

Alternately, if no deal happens, CN still keeps CP from mid-south and Mexico competition. Further, it will likely prevent CP from ever trying it again, or at least for a generation. Given that many, including myself, have long felt a KCS-CP deal a matter of when not if, this is another smooth power play on the otherwise largely crystallized Class One ball field.
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Re: CP to Buy KCS

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GP30M4216
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Re: CP to Buy KCS

Unread post by GP30M4216 »

Guys, even more important than any financial benefits from a continent-wide operator, we might get a Hudson back out on the mainline again 😜

https://railfan.com/canadian-pacific-ce ... oGYy_OZmEU

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Re: CP to Buy KCS

Unread post by David Lang »

Article here from several weeks ago now, but it appears that CP's CEO Keith Creel is going to continue using NS trackage rights between Chicago and Detroit, as well as CSX haulage rights from Chicago to Buffalo, New York for intermodal traffic, so rumors about the possibility of CP acquiring CSX across Michigan per this article are essentially dead it seems.

Creel also "envisions the day when traffic growth from the CP-KCS merger will support building a new tunnel linking Detroit and Windsor, Ontario, that will be able to handle domestic double stacks". More in the linked article below:

https://www.trains.com/trn/news-reviews ... perations/

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