MONTREAL — Kansas City Southern Inc. says it is terminating its merger agreement with CP Rail after determining that rival Canadian National Railway’s revised US$33.6-billion offer was superior.
Under terms of the agreement announced Thursday evening, Montreal-based CN Rail will pay US$200 cash and 1.129 shares of CN stock for each of Kansas City’s 90.9 million shares.
The sum includes a US$700-million break fee payable to Calgary-based Canadian Pacific Railway.
The U.S. railway says it has notified CP Rail that it intends to terminate its agreement.
CP Rail now has the right to amend its offer, with the KCS board to determine whether a revision constitutes a better offer than CN’s.
The transaction is subject to approval by KCS shareholders, approval by the U.S. railway regulator of a voting trust and other regulatory approvals.