SPY437.86+4.23 0.98%
DIA342.50+3.39 1.00%
IXIC14,896.85+150.45 1.02%

UPDATE 2-Kansas City Southern puts off shareholder meet after $29 bln deal suffers setback

reuters.com · 09/01/2021 08:28
UPDATE 2-Kansas City Southern puts off shareholder meet after $29 bln deal suffers setback

Recasts first paragraph, adds background, share movement

- Kansas City Southern KSU said it would adjourn a shareholders' meeting that on Friday was set to vote on its proposed acquisition by Canadian National Railway Co CNI after the $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 Canadian National to proceed with the acquisition. STB cited antitrust concerns for its decision. nL4N2Q23VE

Kansas City Southern announced on Wednesday the adjournment of the special shareholders' meeting, but did not specify when the rescheduled meeting would be held.

Canadian National and smaller rival Canadian Pacific Railway Ltd CP are both vying for Kansas City, seeking to create the first direct railway linking Canada, the United States and Mexico. CP had originally proposed to buy Kansas City but was trumped by CN.

"We are disappointed in the STB's decision to reject Canadian National's proposed voting trust. We are working with Canadian National to evaluate the options available to us," the U.S. railroad operator said in its first comments since the STB rebuff.

Separately, Kansas City said CP had reaffirmed its buyout offer in light of the STB ruling, adding that it would re-evaluate the offer.

Kansas City 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.

Kansas City's shares were up 3.6% after markets opened. They fell 4.4% on Tuesday after the STB's ruling.

(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Ramakrishnan M. and Shailesh Kuber)