CP Sets Dec. 8 Date for Special Meeting of Shareholders to Vote on CP-KCS Merger Agreement
Canadian Pacific Railway Limited (“CP”) announced that it has scheduled a virtual Special Meeting of Shareholders (“Special Meeting”) on Dec. 8, 2021 at 11 a.m. ET (9 a.m. MT) for shareholders to vote on the issuance of the CP common shares to KCS stockholders in connection with the proposed business combination with Kansas City Southern (“KCS”).
All shareholders of record of CP common stock as of the close of business on Nov. 1, 2021 will be entitled to vote their shares at the Special Meeting.
“We are pleased to ask our shareholders to support this unique, once-in-a-lifetime partnership to create the first U.S.-Mexico-Canada rail network,” said Keith Creel, CP President and CEO. “This end-to-end combination is an extraordinary opportunity to inject new competition and capacity into the U.S. rail network and unlock new environmentally-friendly transportation options that will grow the USMCA economy.”
As previously announced on Sept. 15, 2021, CP has agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately USD$31 billion(1), which includes the assumption of $3.8 billion of outstanding KCS debt. The transaction, which has the unanimous support of both boards of directors, values KCS at $300 per share, representing a 34% premium, based on the CP closing price on Aug. 9, 2021, the date prior to which CP submitted a revised offer to acquire KCS, and KCS’ unaffected closing price on March 19, 2021. (2)
On Sept. 30, 2021, the Surface Transportation Board (“STB”) confirmed that it approved the use of a voting trust for the transaction. The conditions to closing into voting trust include receipt of approval from the shareholders of both companies along with the satisfaction of other customary closing conditions, including receipt of Mexican regulatory approvals.
At the closing, KCS shareholders will receive 2.884 CP shares and $90 in cash for each KCS common share held, and KCS’s voting shares will be placed into trust. The companies expect the transaction to close by Q1 2022.
Additional information regarding the combination can be found in the definitive proxy statement that has been filed with the U.S. Securities and Exchange Commission (“SEC”).
1 Except where noted, all figures are in U.S. dollars.
2 Based on KCS closing share price of $224.16 as of March 19, 2021 and CP closing share price of CAD$91.50 (at 1.2565 FX rate) as of Aug. 9, 2021.
About Canadian Pacific
Canadian Pacific (TSX: CP) (NYSE: CP) is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit www.cpr.ca to see the rail advantages of CP. CP-IR
Headquartered in Kansas City, Mo., Kansas City Southern (KCS) (NYSE: KSU) is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS’ North American rail holdings and strategic alliances with other North American rail partners are primary components of a unique railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada. More information about KCS can be found at www.kcsouthern.com.
Source: Canadian Pacific Railway Limited