Canadian Pacific Railway (TSX:CP) has confirmed media reports that it plans to make a new, higher bid for Kansas City Southern (NYSE:KSU).
The board of CP Rail has authorized an offer of $300 U.S. per share, or about $27 billion U.S. for Kansas City Southern, the company has confirmed.
CP Rail’s new offer is an effort to usurp the Kansas City Southern’s pending deal with rival Canadian National Railway.
The latest development adds yet another twist in the competition to see which Canadian railroad will win Kansas City Southern and unite rail networks that stretch southward through the U.S. and into Mexico’s industrial region.
If successful, CP Rail will get retribution after Canadian National Railway (TSX:CNR) intervened with a $30 billion U.S. offer to top CP’s initial $25 billion U.S. bid for Kansas City Southern that sparked the bidding wars back in March.
CP Rail says that its plan would provide Kansas City Southern a better chance of winning regulatory approval from the U.S. Surface Transportation Board, without requiring big divestitures.
The U.S. railway agreed to the Canadian National deal in May. Kansas City Southern shareholders vote on that combination on August 19, and that has motivated CP Rail to make its higher bid.
Shares of Kansas City Southern rose 6.5% to $287 U.S. in pre-market trading on reports of the higher CP Rail bid.
