KANSAS CITY, Mo. — A shareholder advisory firm has recommended that Kansas City Southern investors approve Canadian National’s $33.6 billion offer to acquire the company.
Institutional Shareholder Services, in a report issued Friday, said that the “premium, valuation, and strategic rationale for the transaction are compelling.”
KCS shareholders are scheduled to vote on the deal on Aug. 19.
Canadian Pacific, which earlier had an agreement to merge with KCS, has urged shareholders to reject the CN deal.
But Institutional Shareholder Services noted that “while CP is soliciting votes against the transaction, it has not provided KSU shareholders with any actionable alternative, let alone one that bridges the divide between its initial offer and CNI’s offer.”
CN’s offer is valued at $325 per share, which is $50 more than CP’s bid.
By voting to approve the CN offer, Institutional Shareholder Services said, KCS investors also would lock in the $1 billion breakup fee with CN.
“We are pleased that ISS supports our board’s unanimous recommendation to vote for our combination with CN,” KCS CEO Pat Ottensmeyer said in a statement on Saturday. “In its report, ISS validates our belief that CN is the ideal partner for KCS to power the resurgence of North America’s industrial and agricultural corridors and enhance competition, and that this transaction is in the best interest of KCS and all of our stakeholders.”
The Surface Transportation Board is currently weighing CN’s request to put KCS into a voting trust, a key first step in the merger process. The board’s decision is expected soon.
Roger on all that Mr. Berg, especially your last sentence. ISS is a morally, if not also intellectually, bankrupt organization.
Of course shareholders are going to back the CN plan….they’re “shareholders”…duh! They only know dollar signs, not common sense.