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Kansas City Southern to scrap CP deal after after revised US$33.6-billion offer

Last Updated May 13, 2021 at 9:09 pm EDT

FILE - In this Nov. 5, 2004 file photo, the logo of Kansas City Southern is down on a restored 1954 Kansas City Southern passenger locomotive at Union Station in Kansas City, Mo. A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway. The bid trumps a $25 billion cash-and-stock proposal made by Canadian Pacific last month. Shares of Kansas City Southern jumped more than 18% in Tuesday, April 20, 2021 premarket trading.(Norman Ng/The Kansas City Star via AP)

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.

RELATED: CN fires latest salvo in battle with CP Rail for U.S. railway Kansas City Southern

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.

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