1. Stocks making the biggest moves in the premarket: Kansas City Southern, AutoNation, IBM & more  CNBC
  2. CN Rail Chief Sees a Chance to Pounce With K.C. Southern in Play  Yahoo Finance
  3. Stocks slip as traders digest Johnson & Johnson, IBM earnings, $30B Kansas City Southern deal  Fox Business
  4. Another Canadian company looks to buy Kansas City Southern, this time for $34 billion  Kansas City Star
  5. Canadian National launches battle for Kansas City rail with $30 bln plus bid  CNBC
  6. View Full Coverage on Google News

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(Bloomberg) -- Canadian National Railway Co. offered $30 billion to snatch Kansas City Southern from a rival, spurring a possible bidding war in one of the industry’s biggest potential deals in decades.The bid of $325 a share consists of $200 in cash and 1.059 Canadian National shares for each share of Kansas City Southern, Montreal-based CN said in a statement. Canadian National gave its offer an enterprise value of $33.7 billion.Tuesday’s offer tops a $25 billion deal Kansas City Southern reached with Canadian Pacific Railway Ltd. last month.Canada’s two biggest railroads are vying for a rail network that links their country with the U.S. and Mexico as a reworked trade alliance gets underway and the economic recovery from the Covid-19 pandemic gathers steam. Kansas City Southern’s sprawling system connects farms in the U.S. Midwest to ports along the Gulf of Mexico. It also reaches deep into Mexico, which made up almost half of the Kansas City, Missouri-based company’s revenue last year.“Railroads don’t come for sale very often,” Canadian National Chief Executive Officer Jean-Jacques Ruest said in an interview with Bloomberg TV. “Our vision has been for a long time to create a very solid north-south network.”Canadian National estimated that there’s a pool of about $8 billion of annual truck freight that it could convert to rail and projected that the deal would add to earnings in its first full year. Profit could increase more than 10% when efficiency gains kick in, the company said.The combination would create a “railroad that can really rival with truck,” Ruest said on a call with analysts. “A lot of the freight today that moves north-south is only getting a partial ride by rail or is actually moving all truck, and these are huge distances.”Stephens analyst Justin Long expressed surprise at Tuesday’s offer, given the healthy price that Canadian Pacific had agreed to pay.“But we think Canadian National understood the competitive challenges this deal could present, given the much broader geographic reach of the pro forma CP network,” he wrote. “The Canadian rails face off has begun.”Whoever doesn’t win Kansas City Southern would face a competitive disadvantage, making a bidding war likely, said Citigroup analyst Christian Wetherbee.​“We believe it’s likely that CP remains engaged and may try to come back with a higher bid,” he said in a note to clients. “This clearly would stretch valuation but could be justified by the long-term growth potential of the combined entity.” Canadian Pacific and Kansas City Southern didn’t return requests for comment.Kansas City Southern surged 15% to $295.71 at 11:32 a.m. in New York after jumping 17%, the most intraday since July. Canadian National slumped 6.5% to $138.52 in Toronto, while Canadian Pacific fell 1.4% to $451.32.Canadian National already has large U.S. operations, adding its Chicago-New Orleans line with the purchase of Illinois Central Railroad in 1998. The Canadian railroad overlaps with Kansas City Southern along roughly 70 miles (about 110 kilometers) in Louisiana of its 7,000-mile network and affects only five major customers, the company said. The two networks also run parallel about 40 miles apart during stretches in the southern U.S.Canadian Pacific’s U.S. tracks don’t extend south beyond Kansas City, so it’s planned merger would give the railroad its first access to busy U.S. ports on the Gulf of Mexico.The Canadian railroads are longtime rivals with interlacing histories. Canadian National was privatized from government ownership in the 1990s and outperformed its smaller competitor for much of the early 2000s, cutting costs and expanding its network south through acquisition.In 2012, Canadian Pacific shareholders rebelled, backing hedge fund manager Bill Ackman in a proxy fight to replace the board and install Hunter Harrison, its rival’s former leader, to be chief executive officer. Harrison then poached Keith Creel from Canadian National. Creel is now Canadian Pacific’s CEO. Harrison died in 2017.In 2016, Canadian Pacific paid C$25 million ($20 million) to its rival to settle a lawsuit claiming that Canadian Pacific had pilfered customer lists using employees that had moved between the railroads.Regardless of which offer ultimately wins, it is likely to get close scrutiny as U.S. regulators study whether to approve the biggest rail merger in two decades. Canadian Pacific has already crossed swords with the U.S. Justice Department over a voting trust the company plans to use to close its deal.What Bloomberg Intelligence Says:“A deal would create North America’s third-largest railroad, meaning the regulatory hurdles for clearance are going to be higher than the $25 billion deal KCS accepted from Canadian Pacific. The latter combination would still be the smallest Class I railroad, interchanging in only one spot. KCS interchanges with Canadian National in Springfield, Illinois and East St. Louis, Missouri.”-- Lee Klaskow, BI transportation analystClick here to read the research.Canadian National also plans to use a voting trust, which would hold shares of the new entity and allow control to change hands before gaining regulatory approval. In both proposals, the U.S. and Canadian railroads would operate independently while awaiting government sign-off.Either deal would also face a question over whether a purchase of Kansas City Southern, the smallest of the major U.S. railroads, should be subject to a tougher U.S. standard adopted in 2001 for railroad mergers. The Surface Transportation Board, which has final authority, had exempted Kansas City Southern from the new rules, which require a transaction to benefit the public and improve service. The Justice Department, in an advisory role, had urged using the higher standard.Both Canadian National and Canadian Pacific expressed confidence that their proposals would be approved regardless which standard is used.(Updates with Canadian National CEO’s comment in fifth paragraph. An earlier version of this story corrected Canadian Pacific’s stock movement in premarket trading.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.(Bloomberg) -- Canadian National Railway Co. offered $30 billion to snatch Kansas City Southern from a rival, spurring a possible bidding war in one of the industry’s biggest potential deals in decades.The bid of $325 a share consists of $200 in cash and 1.059 Canadian National shares for each share of Kansas City Southern, Montreal-based CN said in a statement. Canadian National gave its offer an enterprise value of $33.7 billion.Tuesday’s offer tops a $25 billion deal Kansas City Southern reached with Canadian Pacific Railway Ltd. last month.Canada’s two biggest railroads are vying for a rail network that links their country with the U.S. and Mexico as a reworked trade alliance gets underway and the economic recovery from the Covid-19 pandemic gathers steam. Kansas City Southern’s sprawling system connects farms in the U.S. Midwest to ports along the Gulf of Mexico. It also reaches deep into Mexico, which made up almost half of the Kansas City, Missouri-based company’s revenue last year.“Railroads don’t come for sale very often,” Canadian National Chief Executive Officer Jean-Jacques Ruest said in an interview with Bloomberg TV. “Our vision has been for a long time to create a very solid north-south network.”Canadian National estimated that there’s a pool of about $8 billion of annual truck freight that it could convert to rail and projected that the deal would add to earnings in its first full year. Profit could increase more than 10% when efficiency gains kick in, the company said.The combination would create a “railroad that can really rival with truck,” Ruest said on a call with analysts. “A lot of the freight today that moves north-south is only getting a partial ride by rail or is actually moving all truck, and these are huge distances.”Stephens analyst Justin Long expressed surprise at Tuesday’s offer, given the healthy price that Canadian Pacific had agreed to pay.“But we think Canadian National understood the competitive challenges this deal could present, given the much broader geographic reach of the pro forma CP network,” he wrote. “The Canadian rails face off has begun.”Whoever doesn’t win Kansas City Southern would face a competitive disadvantage, making a bidding war likely, said Citigroup analyst Christian Wetherbee.​“We believe it’s likely that CP remains engaged and may try to come back with a higher bid,” he said in a note to clients. “This clearly would stretch valuation but could be justified by the long-term growth potential of the combined entity.” Canadian Pacific and Kansas City Southern didn’t return requests for comment.Kansas City Southern surged 15% to $295.71 at 11:32 a.m. in New York after jumping 17%, the most intraday since July. Canadian National slumped 6.5% to $138.52 in Toronto, while Canadian Pacific fell 1.4% to $451.32.Canadian National already has large U.S. operations, adding its Chicago-New Orleans line with the purchase of Illinois Central Railroad in 1998. The Canadian railroad overlaps with Kansas City Southern along roughly 70 miles (about 110 kilometers) in Louisiana of its 7,000-mile network and affects only five major customers, the company said. The two networks also run parallel about 40 miles apart during stretches in the southern U.S.Canadian Pacific’s U.S. tracks don’t extend south beyond Kansas City, so it’s planned merger would give the railroad its first access to busy U.S. ports on the Gulf of Mexico.The Canadian railroads are longtime rivals with interlacing histories. Canadian National was privatized from government ownership in the 1990s and outperformed its smaller competitor for much of the early 2000s, cutting costs and expanding its network south through acquisition.In 2012, Canadian Pacific shareholders rebelled, backing hedge fund manager Bill Ackman in a proxy fight to replace the board and install Hunter Harrison, its rival’s former leader, to be chief executive officer. Harrison then poached Keith Creel from Canadian National. Creel is now Canadian Pacific’s CEO. Harrison died in 2017.In 2016, Canadian Pacific paid C$25 million ($20 million) to its rival to settle a lawsuit claiming that Canadian Pacific had pilfered customer lists using employees that had moved between the railroads.Regardless of which offer ultimately wins, it is likely to get close scrutiny as U.S. regulators study whether to approve the biggest rail merger in two decades. Canadian Pacific has already crossed swords with the U.S. Justice Department over a voting trust the company plans to use to close its deal.What Bloomberg Intelligence Says:“A deal would create North America’s third-largest railroad, meaning the regulatory hurdles for clearance are going to be higher than the $25 billion deal KCS accepted from Canadian Pacific. The latter combination would still be the smallest Class I railroad, interchanging in only one spot. KCS interchanges with Canadian National in Springfield, Illinois and East St. Louis, Missouri.”-- Lee Klaskow, BI transportation analystClick here to read the research.Canadian National also plans to use a voting trust, which would hold shares of the new entity and allow control to change hands before gaining regulatory approval. In both proposals, the U.S. and Canadian railroads would operate independently while awaiting government sign-off.Either deal would also face a question over whether a purchase of Kansas City Southern, the smallest of the major U.S. railroads, should be subject to a tougher U.S. standard adopted in 2001 for railroad mergers. The Surface Transportation Board, which has final authority, had exempted Kansas City Southern from the new rules, which require a transaction to benefit the public and improve service. The Justice Department, in an advisory role, had urged using the higher standard.Both Canadian National and Canadian Pacific expressed confidence that their proposals would be approved regardless which standard is used.(Updates with Canadian National CEO’s comment in fifth paragraph. An earlier version of this story corrected Canadian Pacific’s stock movement in premarket trading.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

CN Rail Chief Sees a Chance to Pounce With K.C. Southern in Play

U.S. equity markets were lower Tuesday as investors assessed a mega-deal in the rail industry and sifted through a slew of earnings reports.U.S. equity markets were lower Tuesday as investors assessed a mega-deal in the rail industry and sifted through a slew of earnings reports.

Stocks slip as traders digest Johnson & Johnson, IBM earnings, $30B Kansas City Southern deal | Fox Business

The stock price of Kansas City Southern (NYSE: KSU) increased by over 15% pre-market. This is why it happened.The stock price of Kansas City Southern (NYSE: KSU) increased by over 15% pre-market. This is why it happened.

KSU Stock: Over 15% Increase Pre-Market Explanation

KSU Stock: Over 15% Increase Pre-Market Explanation

Two Canadian railroad companies are now involved in a bidding war to acquire Kansas City Southern and its key route to Mexico and the Panama Canal.Two Canadian railroad companies are now involved in a bidding war to acquire Kansas City Southern and its key route to Mexico and the Panama Canal.

Kansas City Southern part of Canadian railroad bidding war

www.kansascity.com

A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway.A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway.

CN bids $33.7B for Kansas City Southern, tops $25B proposal | News - State & Regional - Missouri | stltoday.com

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NORTH AMERICA: Canadian National has unveiled a rival bid to acquire Kansas City Southern, insisting to investors that its offer presented to the KCS directors on April 20 would be ‘superior’ to the proposed merger between KCS and Canadian Pacific announced on March 21.NORTH AMERICA: Canadian National has unveiled a rival bid to acquire Kansas City Southern, insisting to investors that its offer presented to the KCS directors on April 20 would be 'superior' to the proposed merger between KCS and Canadian Pacific announced on March 21.

Canadian National launches US$34bn rival bid for KCS | News | Railway Gazette International

Perhaps not so surprisingly, almost exactly one month to the day after Canadian Pacific and Kansas City Southern announced their intent to merge into CPKC (Canadian Pacific Kansas City), CN made a counter-offer it said is a “superior proposal” that “will result in a safer, faster, cleaner and stronger railway.” CN’s proposal of $325 per KCS share “represents a 21% premium over the implied value of the CP transaction and values KCS at an enterprise value of $33.7 billion.”

CN Counters CPKC with a ‘Superior Proposal’ - Railway Age

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Not to be outdone by rival Canadian Pacific, CN offers to acquire Kansas City Southern for $33.7 billion.Not to be outdone by rival Canadian Pacific, CN offers to acquire Kansas City Southern for $33.7 billion.

News Alert: CN makes nearly $34 billion bid for Kansas City Southern - FreightWaves

CALGARY — The CEO of Canadian National Railway Co. says his company's bid for Kansas City Southern will create a combined "safer, faster, cleaner and stronger railway" than the one proposed by rival Canadian Pacific Railway Ltd.On Tuesday, the Montreal-based railway announced a cash-and-stock bid valued at US$33.7 billion for KCS, topping one made last month by Calgary-based CP Rail valued at US$25 billion."CN's proposal represents a 21 per cent premium to CP's offer and more than double the cash per shares, resulting in not just a greater value but also greater certainty of value for KCS shareholders," said CN chief executive Jean-Jacques Ruest on a conference call to discuss the proposal."Our superior access to the capital market, stronger balance sheet, lower cost of financing and ability to realize superior and higher-quality synergies allow us to make a more attractive offer to KCS shareholders."CN is offering US$200 in cash and 1.059 shares of CN common stock for each KC common share. The proposal was worth about $317 per share based on share prices Tuesday morning.The CP Rail deal offers 0.489 of a CP share and US$90 in cash for each KCS common share for a value of nearly US$269 per share, based on CP's share price Tuesday."At first glance, while CNR’s offer is superior from a financial standpoint, we believe the regulatory risk for its offer is higher than that for CP, which has no network overlap with KSU — something that KSU’s board will have to consider when evaluating the proposal," said Desjardins analyst Benoit Poirier in a report.On the call, Ruest estimated the CNR-KCS combination would result in a US$1-billion boost in earnings before interest, taxation, depreciation and amortization within three years, with about 80 per cent of that from new business by convincing customers who use trucks to use rail instead. The other 20 per cent would come from cost savings, although CN says its network has very little direct overlap with the KCS system.Poirier said the synergies estimate is higher than the US$780 million under the CP offer, suggesting that can be partly explained by some rail network overlap between KCS and CN compared with no overlap between KCS and CP.Ruest said CN's bid won't require approval from its shareholders, unlike CP's bid."By competing head to head at lower cost, with safer service and better fuel efficiency, from Mexico to the heartland of America, the result will be a safer, faster, cleaner and stronger railway than any other proposed combination for KCS," he said.On the call, Ruest said the timing of CN's bid is opportunistic."Why now? The board of KCS has decided it wants to crystallize the value for their shareholders, therefore the opportunity is now," he said.In a letter to the KCS board of directors, Ruest said the CN offer offers greater value certainty due to the larger cash component. CN plans to assume US$3.8 billion of KCS debt under its plan."CN and KCS will have a robust network of end-to-end single-line services from Mexico to Canada, with an enhanced ability to connect ports in the Atlantic, Pacific and the Gulf of Mexico," Ruest wrote."The combined company will be the premier service-competitive railway to Michigan and Eastern Canada, resulting in better efficiency both in terms of fuel and customer service." When CP Rail and KCS announced their friendly deal last month, they said it would create the first rail network connecting Canada, the United States and Mexico.CP Rail chief executive Keith Creel said when the deal was announced that the transaction would be transformative for North America, providing significant positive impacts for employees, customers, communities, and shareholders.The combination of CP Rail and KCS would create a combined company will operate more than 32,100 kilometres of rail and generate total revenues of approximately US$8.7 billion based on 2020 figures.A spokesperson for CP Rail said the company had no immediate comment. Kansas City shares surged more than 16 per cent, or $41.26 at US$297.66 on the New York Stock Exchange.CN's share were down $8.75 or 5.9 per cent at $139.41 in Toronto, while CP's shares fell by $8.96 or 1.9 per cent at $448.94.This report by The Canadian Press was first published April 20, 2021.Companies in this story: (TSX:CP, TSX:CNR) Dan Healing, The Canadian PressCALGARY — The CEO of Canadian National Railway Co. says his company's bid for Kansas City Southern will create a combined "safer, faster, cleaner and stronger railway" than the one proposed by rival Canadian Pacific Railway Ltd.On Tuesday, the Montreal-based railway announced a cash-and-stock bid valued at US$33.7 billion for KCS, topping one made last month by Calgary-based CP Rail valued at US$25 billion."CN's proposal represents a 21 per cent premium to CP's offer and more than double the cash per shares, resulting in not just a greater value but also greater certainty of value for KCS shareholders," said CN chief executive Jean-Jacques Ruest on a conference call to discuss the proposal."Our superior access to the capital market, stronger balance sheet, lower cost of financing and ability to realize superior and higher-quality synergies allow us to make a more attractive offer to KCS shareholders."CN is offering US$200 in cash and 1.059 shares of CN common stock for each KC common share. The proposal was worth about $317 per share based on share prices Tuesday morning.The CP Rail deal offers 0.489 of a CP share and US$90 in cash for each KCS common share for a value of nearly US$269 per share, based on CP's share price Tuesday."At first glance, while CNR’s offer is superior from a financial standpoint, we believe the regulatory risk for its offer is higher than that for CP, which has no network overlap with KSU — something that KSU’s board will have to consider when evaluating the proposal," said Desjardins analyst Benoit Poirier in a report.On the call, Ruest estimated the CNR-KCS combination would result in a US$1-billion boost in earnings before interest, taxation, depreciation and amortization within three years, with about 80 per cent of that from new business by convincing customers who use trucks to use rail instead. The other 20 per cent would come from cost savings, although CN says its network has very little direct overlap with the KCS system.Poirier said the synergies estimate is higher than the US$780 million under the CP offer, suggesting that can be partly explained by some rail network overlap between KCS and CN compared with no overlap between KCS and CP.Ruest said CN's bid won't require approval from its shareholders, unlike CP's bid."By competing head to head at lower cost, with safer service and better fuel efficiency, from Mexico to the heartland of America, the result will be a safer, faster, cleaner and stronger railway than any other proposed combination for KCS," he said.On the call, Ruest said the timing of CN's bid is opportunistic."Why now? The board of KCS has decided it wants to crystallize the value for their shareholders, therefore the opportunity is now," he said.In a letter to the KCS board of directors, Ruest said the CN offer offers greater value certainty due to the larger cash component. CN plans to assume US$3.8 billion of KCS debt under its plan."CN and KCS will have a robust network of end-to-end single-line services from Mexico to Canada, with an enhanced ability to connect ports in the Atlantic, Pacific and the Gulf of Mexico," Ruest wrote."The combined company will be the premier service-competitive railway to Michigan and Eastern Canada, resulting in better efficiency both in terms of fuel and customer service." When CP Rail and KCS announced their friendly deal last month, they said it would create the first rail network connecting Canada, the United States and Mexico.CP Rail chief executive Keith Creel said when the deal was announced that the transaction would be transformative for North America, providing significant positive impacts for employees, customers, communities, and shareholders.The combination of CP Rail and KCS would create a combined company will operate more than 32,100 kilometres of rail and generate total revenues of approximately US$8.7 billion based on 2020 figures.A spokesperson for CP Rail said the company had no immediate comment. Kansas City shares surged more than 16 per cent, or $41.26 at US$297.66 on the New York Stock Exchange.CN's share were down $8.75 or 5.9 per cent at $139.41 in Toronto, while CP's shares fell by $8.96 or 1.9 per cent at $448.94.This report by The Canadian Press was first published April 20, 2021.Companies in this story: (TSX:CP, TSX:CNR) Dan Healing, The Canadian Press

CN makes rival bid to CP Rail's offer to buy U.S. railway Kansas City Southern

Canadian National Railway Company (TSX:CNR)(NYSE:CNI) has pioneered scheduled railroading and uses advanced technology as a driver for safety.Canadian National Railway Company (TSX:CNR)(NYSE:CNI) has pioneered scheduled railroading and uses advanced technology as a driver for safety.

TFSA Investors: 1 Great Business to Hold Over the Long-Term | The Motley Fool Canada

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Canadian National Railway Co. is trying to buy U.S. railway Kansas City Southern out from under the nose of rival Canadian Pacific, which launched a takeover offer of its own for the U.S. carrier last month.Canadian National Railway Co. is trying to buy U.S. railway Kansas City Southern out from under the nose of rival Canadian Pacific, which launched a takeover offer of its own for the U.S. carrier last month.

www.cbc.ca

Will Canadian Pacific return with an even bigger bid?

Posthaste: Five key takeaways from Canadian National Railway’s 'superior' proposal for Kansas City Southern | Financial Post

Posthaste: Five key takeaways from Canadian National Railway’s 'superior' proposal for Kansas City Southern | Financial Post

Canadian National Railway is launching a bidding war with Canadian Pacific Railway over Kansas City Southern (KCS).

CN launches bidding war with CP over Kansas City Southern - BNN Bloomberg

The bid would be a 20% premium to CP's $25 billion deal reached last month

CN Rail trumps rival CP's bid with $30 billion offer for Kansas City Southern | Financial Post

CN Rail trumps rival CP's bid with $30 billion offer for Kansas City Southern | Financial Post

A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway. The bid trumps a $25 billion cash-and-stock proposal made by Canadian Pacificlast month. Any deal would capitalize on growing trade across North America by creating the first railroad that would link the […]A bidding war is breaking out for Kansas City Southern, with Canadian National Railway making a $33.7 billion cash-and-stock offer for the railway. The bid trumps a $25 billion cash-and-stock propo…

CN bids $33.7B for Kansas City Southern, tops $25B proposal | YourCentralValley.com KSEE24 | CBS47

Canadian National Railway Co. made a rival takeover offer Tuesday for Kansas City Southern in a cash-and-stock bid valued at US$33.7 billion.Canadian National Railway Co. made a rival takeover offer Tuesday for Kansas City Southern in a cash-and-stock bid valued at US$33.7 billion.

CN rivals CP’s bid to buy Kansas City Southern — offers more money, shares - National | Globalnews.ca

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