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CP objects to CN using merger waiver that STB granted to CP-KCS deal

Rail News Home Kansas City Southern 5/3/2021 Rail News: Kansas City Southern
image Canadian Pacific late last week filed a formal objection with the Surface Transportation Board (STB) stating that CN does not qualify for a waiver of the STB's rules for major transactions with respect to CN's proposal to acquire Kansas City Southern. In its letter, CP states that the CN-KCS transaction does not satisfy the criteria that the STB relied upon in finding that the waiver should apply to a CP-KCS transaction, which the STB granted on April 23. Meanwhile, in other developments:
• CN today issued an open letter to the KCS community regarding CN’s proposal to combine with KCS. The letter outlines why CN believes a combined CN-KCS represents the best solution for all stakeholders and sets the record straight on the merits of the proposal.
• CP today announced that more than 110 customers and other stakeholders have filed letters with the STB to express concerns about and/or opposition to CN’s proposal for KCS. The letters from customers and other stakeholders highlight growing concerns that the CN-KCS combination would reduce competition in the Canada-U.S.-Mexico corridor, CP officials said in a press release.
• CN late last week announced that more than 200 additional letters in favor of its proposed KCS combination have been filed with the STB, bringing the total number of support letters CN has received to more than 600 in just over a week since its proposal was made public. That number exceeds the number of letters that CP has received in over five weeks, CN officials said in a press release.

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KCS to begin talks with CN; STB rules on merger waiver issue

Rail News Home Kansas City Southern 4/26/2021 Rail News: Kansas City Southern
image Kansas City Southern’s board has unanimously determined that the unsolicited proposal received from CN last week to acquire KCS in a cash and stock transaction, valued by CN at $325 per share, could reasonably be expected to lead to a "company superior proposal" as defined in KCS’s merger agreement with Canadian Pacific.KCS intends to provide CN with nonpublic information and to engage in discussions and negotiations with CN, subject to the requirements of the CP merger agreement, KCS officials said in a press release. However, there's no assurance the talks with CN will result in a transaction, they said. "We fully support the board of KCS in reviewing CN's offer," said CP President and Chief Executive Officer Keith Creel in a press release. "We are confident through this process that they will recognize this unsolicited bid is fraught with challenges, uncertainties and regulatory risks that are not present in the seamless, pro-competitive and pro-service CP-KCS combination." In March, CP and KCS announced a merger agreement in which CP would acquire KCS in a stock and cash transaction valued at $275 per KCS share. Meanwhile, the Surface Transportation Board (STB) ruled late last week that a waiver provision under 49 C.F.R. § 1180.0(b) applies to the potential transaction between CP and KCS. The 2001 merger regulation granted a waiver allowing a merger involving KCS and another Class I  to be considered under the STB’s pre-2001 merger regulations, subject to the board’s review. Per the board’s decision, the agency’s review of the transaction will be governed by the regulations set forth at 49 C.F.R. part 1180 (2000), STB officials said in a press release. In other related developments:
• CP announced it has no objection to CN’s request to also appoint David Starling as intended trustee in its unsolicited bid of KCS;
• CN announced that more than 400 customers, suppliers, elected officials and other stakeholders have filed letters with the STB in favor of CN's proposed combination with KCS.

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KCS posts lower revenue in Q1, names Songer and Orr EVPs

Kansas City Southern last week reported first-quarter 2021 revenue of $706 million, down 4% from the same period a year ago.

Overall, carload volumes were down 1% compared with volumes in Q1 2020, KCS officials said in a press release.

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KCS reports 'strong' results in Q4

Kansas City Southern today reported fourth-quarter 2020 revenue declined 5% to $693.4 million compared with $729.5 million during the same period in 2019.

KCS officials attribute the decrease primarily to lower volumes related to a service interruption in Mexico due to teachers protests, lower fuel surcharge and fluctuations in foreign currency.

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KCS, NorthPoint to develop Wylie Logistics Park

Rail News Home Kansas City Southern 1/21/2021 Rail News: Kansas City Southern
image The master planned park will offer 2.4 million square feet of potential building capacity for traditional warehousing and distribution.Photo – Kansas City Southern/YouTube

Kansas City Southern has entered into a joint agreement with NorthPoint Development to develop Wylie Logistics Park in Wylie, Texas, adjacent to the Class I's David L. Starling Wylie Intermodal Terminal.

The master planned park will offer 2.4 million square feet of potential building capacity for traditional warehousing and distribution; industrial grade amenities; dual feed electrical system with redundant power; as well as a heavy-haul network with access to the interstate system, air, ports and a state-of-the-art intermodal terminal.

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