KCS Speaks Out on CP’s Preliminary Proxy Statement
Written by Marybeth Luczak, Executive EditorCanadian Pacific’s SEC filing asking Kansas City Southern shareholders to vote against the proposed CN-KCS combination is “part of an effort to defeat a transaction that offers KCS shareholders $50 per share more than CP was willing to offer,” KCS said in an Aug. 2 statement.
CP reported on July 29 that it filed a preliminary proxy statement and accompanying “BLUE” proxy card with the Securities and Exchange Commission (SEC) “so that CN’s proposed acquisition can be decided at a later date, when more information will be available to KCS stockholders.” Stockholders are scheduled to vote on KCS’s proposed merger with CN on Aug. 19.
“CP has always said it wanted to do a friendly deal with KCS, and that remains true,” CP President and CEO Keith Creel said July 29. “CP would have preferred not to appeal directly to KCS’s stockholders, but given their impending vote on CN’s proposal, we believe we have no choice. We are simply contesting the vote on the CN-KCS proposal because a ‘yes’ vote now would lock-in KCS stockholders until February 21, 2022, instead of their being free to consider other, better, options.”
On Aug. 2, KCS issued the following statement:
“CP’s filing of a preliminary proxy seeking votes against the CN transaction is part of an effort to defeat a transaction that offers KCS shareholders $50 per share more than CP was willing to offer. In May, CP decided not to take advantage of its five-business-day match right, per the terms of its initial merger contract, to compete with CN’s superior proposal. Since that time, CP has consistently criticized our combination with CN. CP claims in its latest filing that it is, ‘ready to re-engage with KCS,’ but it did not make any new proposal in its most recent filing. Nor did it commit to making one in the future, going on to say, ‘there can be no assurances that Canadian Pacific will make an offer or proposal to KCS.’
“KCS believes that shareholders should focus on the opportunity to receive a value under the CN combination of $325 per share, compared to CP’s now terminated offer of $275 per share. We believe that CP’s recommendation to vote against our combination with CN is not in our shareholders’ interest. Shareholder approval of the CN transaction best positions KCS to deliver superior value to our shareholders as soon as possible.
“We continue to recommend that our shareholders vote ‘FOR’ the combination with CN, which has compelling benefits for all stakeholders including notably, our customers. Together with CN, we will create the premier railway for the 21st century, bringing together highly complementary networks to benefit customers, enhancing industry competition, and delivering significant value to shareholders immediately upon close of CN’s voting trust.
“KCS’ definitive proxy materials can be found on the SEC’s website at www.sec.gov. The proxy materials have been mailed to all shareholders eligible to vote at the Special Meeting, which can be accessed at meetings.computershare.com/MUKQC2H.”