Canadian Pacific Railwayannounces its shareholders voted overwhelmingly in favor of the issuance of CP common shares toKansas City Southerncommon stockholders in connection with the proposed CP-KCS combination.
“The shareholder approvals are a key step on our path to this once-in-a-lifetime partnership to create the first U.S.-Mexico-Canada rail network,” said Keith Creel, CP president and CEO. “This is a transformative opportunity for CP, for KCS and for the North American economy.”
CP shareholders voted on two items of business at last Wednesday’s special meeting of shareholders. The first was an ordinary resolution to approve the issuance of up to 277,960,197 CP common shares as the share consideration under the terms of the merger agreement.
The second was a special resolution to approve an amendment to CP’s articles of incorporation to change its name to Canadian Pacific Kansas City Limited, a change contingent upon the approval by the U.S. Surface Transportation Board of the proposed CP-KCS combination.
“The overwhelming support our shareholders have given to the transaction is critical to making this combination a reality,” Creel added.
“In the coming days, we will be working to complete the steps required to close into the voting trust, and in the months ahead we look forward to participating in the STB’s comprehensive regulatory review."
Creel said following receipt of STB approval and consummation of CP control, Canadian Pacific Kansas City will add new capacity to the U.S. rail network, create new competitive transportation options, support North American economic growth, and deliver other important benefits to customers, employees, and the environment.
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 $31 billion, 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’s unaffected closing price on March 19, 2021.
2021年9月30日,新加坡旅游局appro证实它ved 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.
Required Mexican regulatory approvals were received last month and a special meeting of KCS stockholders to vote on the merger agreement is scheduled for Friday, Dec. 10, 2021. Provided the transaction is approved by KCS stockholders on Friday, the transaction is expected to close into trust two business days later on Dec. 14, 2021.
At the closing into trust, KCS common stockholders will receive 2.884 CP shares and $90 in cash for each KCS common share held. KCS preferred stockholders will receive $37.50 for each KCS preferred share held, and KCS’s voting shares will be placed into trust.
On Nov. 23, 2021, the STB formally accepted the CP-KCS control application and issued a procedural schedule. The STB's review of CP’s proposed control of KCS is expected to be completed in the fourth quarter of 2022.
