The Canadian National Railway Company (CNC) may face regulatory hurdles in its attempt to acquire the US-based Kansas City Southern (KCS), but the management of the Montreal-based company believes that many of its major shareholders believe the game is a difficult outcome.
Along with billionaire Bill Gates, investment firm Cascade holds the largest stake in CN (12%), while Kaisse de Depot at Placement du Quebec (CDPQ) is also the largest rail carrier with 33, US $ 7 billion behind the country.
“Most [des actionnaires] Canadian National President and CEO Jean-Jacques Roost observed Wednesday during a virtual conference hosted by Bank of America, where he presented the names of Mr. Gates and the CDPQ.
CNN’s fifth largest shareholder and the largest TCI fund management in Canadian Pacific (CP) on Tuesday asked Mr Roost about shareholder sentiment following concerns – which also kept an eye on KCS.
In a letter dated May 3 addressed to Mr. Roost Tap In addition to providing “new markets for Quebec exporters”, Kaisse believes CN’s offer, if implemented, would create jobs at a company based in Montreal.
The acquisition is linked to CDPQ’s goals of helping Quebec businesses grow internationally and support the transition to a low – carbon economy.
Kim Thomasin, Vice President and Head of Investment in Quebec at Caes de Depot
According to data firm Refinitive, Pension Plan Manager is the ninth largest CN shareholder with approximately 1.7% stake. He owns 57,446 KCS shares, or holds less than 1% of the securities.
The deadline is approaching
KNS is at the heart of the dual battle between CNC and CP, each of whom is eager to get his hands on a U.S. rail carrier, due to its rail assets in Mexico. The two railroads each want to own a system beyond the United States to get to that country.
However, it was time for the CP to make an official response to the KCS Board of Directors by 5pm on Thursday, which CN decided to turn to the offer, which it considers superior. On March 21, Calgary Railways announced a $ 25.2 billion deal with KCS.
CN is now the surface transportation board (STB) – the U.S. regulator of railroad mergers. Regulator – should be persuaded to set up a voting trust while the agreement is under consideration. Regulatory authorities.
If STB rejects its request, the company will have to pay US $ 1 billion to KCS. The rail carrier has already accepted the bill for an estimated fee of $ 700 million if KCS concludes its contract with CP.
In addition, the STB decided to evaluate the proposal of the Quebec Railroad based on strict regulations, with the exception of its Alberton rival.
For TCI Fund Management, a London hedge fund led by billionaire Christopher Hahn, these losses should prompt CC to bid for KCS.
“We believe that regulatory risk can be adequately managed by taking it step by step,” Roost said.
In a report released Tuesday, the firm expects the burden of proof for CN to increase, given the recent decision by Steve Hansen regulatory officials of the company Raymond James.
However, the rail company expects to get STB approval for its voting trust in early June and hopes to receive majority support from KCS shareholders in July. The transaction approval process is expected to last until next year.