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Canadian National Railroad (CN) has not been deterred from its desire to buy Kanas City Southern at $33.6 billion dollars despite objections from TCI fund, an almost 3 percent shareholder and London-based investment firm.
TCI told Canadian National's board that it objects to the acquisition as it remains unclear if U.S transit regulators will approve the merger. However, TCI may have a conflict of interest concern as it is the largest shareholder in Candian Pacific, another company that is also trying to purchase Kansas City Southern. Candian Pacific's current bid is $25 billion but it has until Thursday to update it.
Canadian National's majority shareholder, Bill Gates' Cascade Investment has publicly supported the acquisition of Kanas City Southern. JJ Ruest, CEO of Canadian National, believes the majority of shareholders back the deal and that with time it will be approved by regulators.
Russet told investors at a conference to "leave no doubt, Canadian National is very committed to this transaction."
For more reporting on this story from the Associated Press, see below.
Canadian National's acquisition of Kansas City Southern would be the first major railroad merger in more than 20 years.
Canadian Pacific has said allowing Canadian National and Kansas City Southern to combine would hurt competition.
The Surface Transportation Board has said it will review any deal involving major railroads carefully to determine if it would enhance competition and serve the public interest. Earlier this week, the board initially refused to approve Canadian National's plan to set up a voting trust that would acquire Kansas City Southern and own the railroad while regulators review the deal. The board said it didn't have a copy of the detailed merger agreement.
