Montreal’s Canadian National heats up battle for Kansas City rail with $30bn-plus bid

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Montreal’s Canadian National heats up battle for Kansas City rail with $30bn-plus bid

Canadian National Railway, the Montreal, Quebec-headquartered Canadian Class I freight railway operator serving in the Midwestern and Southern United States apart from Canada, had issued a statement late on Tuesday saying that the Canadian railway operator had placed a $30 billion-plus bid to purchase the Kansas City southern, a Delaware-registered pure transportation holding having had railways in the United States, Mexico and Panama, ramping up a bidding war with Canadian Pacific.

In point of fact, the Canadian National’s latest $30 billion-plus takeover bid for Kansas City Southern came forth weeks after Canadian Pacific had agreed to a $25 billion buyout deal for Kansas City Southern, eventually soaring the US-based railway operator’s shares’ prices as much as 15.25 per cent to $295.50 apiece over growing possibilities of a bidding war.

More importantly, a successful merger deal for Kansas City Southern with either railway operator would lay off a groundwork for the largest North American railway network bridging the United States, Canada and Mexico.

Canadian National offers $325 per share for Kansas City Southern

If truth is to be told, although a takeover of Kansas City Southern seems indubitably profitable following the ratification of a US-Mexico-Canada trade agreement last year that set aside threats of trade tensions over tariffs, several analysts were quoted saying following the announcement that the Canadian National’s takeover bid of $325 per share., representing a premium of 26.8 per cent of Kansas City Southern’s Monday’s closing price, might have overvalued the US-based railway operator's current valuation.

Meanwhile, followed by Canadian National announcement, a Stephens analyst Justin Long wrote in a client note, “We are surprised by this move given the healthy valuation Canadian Pacific had already offered to Kansas City Southern shareholders.