Kansas City Missouri USA - KCS said it would adjourn a shareholders' meeting that on Friday was set to vote on its proposed acquisition by CN after the US$29 billion deal was dealt a blow by regulators.
 
The U.S. Surface Transportation Board (STB) rejected on Tuesday a voting trust structure that would have allowed CN to proceed with the acquisition.
 
STB cited antitrust concerns for its decision.
 
KCS announced on Wednesday the adjournment of the special shareholders' meeting, but did not specify when the rescheduled meeting would be held.
 
CN and smaller rival CP are both vying for KCS, seeking to create the first direct railway linking Canada, the United States, and Mexico.
 
CP had originally proposed to buy KCS but was trumped by CN.
 
"We are disappointed in the STB's decision to reject CN's proposed voting trust. We are working with CN to evaluate the options available to us," the U.S. railroad operator said in its first comments since the STB rebuff.
 
Separately, KCS said CP had reaffirmed its buyout offer in light of the STB ruling, adding that it would re-evaluate the offer.
 
KCS and CN do have the option of seeking a full approval, but regulatory experts said the process would be uncertain, and could last more than a year.
 
KCS's shares were up 3.6 percent after markets opened.
 
They fell 4.4 percent on Tuesday after the STB's ruling.
 
Author unknown.