Kansas City Missouri USA - KCS today announced that the Company has scheduled a virtual Special Meeting of Stockholders to vote on the proposed combination with Canadian Pacific Railway Limited (CP) on 10 Dec 2021 at 10:00 Eastern Time.
 
All stockholders of record of KCS common stock and KCS 4 percent non-cumulative preferred stock as of the close of business on 14 Oct 2021 will be entitled to vote their shares at the Special Meeting.
 
CP has agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately US$31 billion, which includes the assumption of US$3.8 billion of outstanding KCS debt as previously announced on 15 Sep 2021.
 
The transaction, which has the unanimous support of both boards of directors, values KCS at US$300 per share, representing a 34 percent premium, based on the CP closing price on 9 Aug 2021, the date prior to which CP submitted a revised offer to acquire KCS, and KCS' unaffected closing price on 19 Mar 2021.
 
Under the terms of the agreement, KCS stockholders will receive US$90 in cash and 2.884 CP shares for each KCS common share held and US$37.50 in cash for each KCS preferred share held.
 
The KCS Board of Directors unanimously recommends that stockholders vote "FOR" the merger agreement with CP and the other proposals outlined in the definitive proxy statement.
 
The transaction requires approvals from stockholders of both KCS and CP along with satisfaction of customary closing conditions, including Mexican regulatory approvals, before it can close into CP's voting trust that has already been approved by the Surface Transportation Board (STB).
 
Upon closing into CP's voting trust, KCS stockholders will receive their merger consideration, which is expected to be by the first quarter of 2022.
 
CP's ultimate acquisition of control of KCS' U.S. railways is subject to the approval of the STB, which is expected to be completed in the second half of 2022.
 
Upon obtaining control approval, the two companies will be integrated fully over the ensuing three years, unlocking the benefits of the combination.
 
Author unknown.