• For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.
For topics on Class I and II passenger and freight operations more general in nature and not specifically related to a specific railroad with its own forum.

Moderator: Jeff Smith

  by wally
JayBee wrote: Fri May 28, 2021 9:00 am The CN agreement to buy Pan Am was just sent back to CSX as incomplete, among the mentioned issues was a lack of projections for traffic growth, plus the effect on NS.
sounds like you've mixed your mergers together.
  by justalurker66
The STB wants additional documentation from CN and KCS and they want the documents by Monday, June 14th. Others will have until June 28th to comment on the proposed Voting Trust then CN/KCS will have until July 6th to reply to those comments.
As the Board explained in Decision No. 3, in adopting the new rule in Major Rail Consolidation Procedures, 5 S.T.B. 539 (2001), the Board called for a more cautious approach to proposed voting trusts in transactions subject to the modified requirements for approval established at 49 C.F.R. § 1180.4(b)(4)(iv). See Decision No. 3, FD 36514, slip op. at 6-7. Consistent with that more cautious approach contemplated by the new rule, and to inform public comments, Applicants are directed to file the following documents by June 14, 2021:

* The written opinions of the financial advisors referenced in Section 4.16 of the Merger Agreement. (See Applicants’ May 26 Motion, Ex. 8.)
* The Debt Commitment Letters referenced in Section 4.17(a) of the Merger Agreement, including all exhibits and schedules. (See id. Ex. 8.)
* Section 5.1 of the Company Disclosure Schedules referenced in Section 5.1(a) of the Merger Agreement, together with any other section(s) of the Company Disclosure Schedules that pertain to the Company Capital Allocation Policy referenced in Section 5.1(a) of the Merger Agreement and/or the “[KCS] pre-existing capital allocation policy” referenced in Applicants’ May 26 Motion. (See id. at 9 n.14; id. Ex. 3 at 14-15; id. Ex. 8.)

Pursuant to 49 C.F.R. § 1180.4(b)(4)(iv), the Board will establish a brief comment period. In setting the comment period, the Board has considered the scope and complexity of the issues presented by Applicants’ May 26 Motion and included a five-day period for Applicants to submit the requested documents. Comments on the proposed use of a voting trust in this transaction will be due on June 28, 2021, and Applicants’ reply will be due on July 6, 2021.
  by Gilbert B Norman
In this discussion we have thrown the term voting trust around a lot, but let's be honest, you have to be a rather sophisticated investor to know what that term means.

So let's look to Investopedia for a little assistance:


Fair Use:
A voting trust is a legal trust created to combine the voting power of shareholders by temporarily transferring their shares to the trustee. In exchange for their shares, shareholders receive certificates indicating they are beneficiaries of the trust. The trustee is often obligated to vote in accord with the wishes of these participating shareholders.
  by justalurker66
Except in this case the Voting Trust is specifically worded to prevent the trustee from being controlled by the parent company. The Voting Trust must prevent control from being transferred to CN before the STB approves the transfer of control to CN.

The STB approved CP's Voting Trust under the pre-2001 rules. The current rules are more stringent with the filing schedule as shown in my previous post.
  by Shortline614
Well this is just bizarre...

From Trains Magazine:
Canadian Pacific’s campaign against Canadian National’s proposed acquisition of Kansas City Southern took a new turn today with a half-page ad in The Washington Post that featured an editorial cartoon-style illustration – complete with caricatures of the three railroads’ chief executives.
https://www.trains.com/trn/news-reviews ... cs-merger/

The cartoon is attached below. To be honest, I don't think it looks good at all. I assume this is targeting politicians rather than shippers who overwhelmingly support CN-KCS.
You do not have the required permissions to view the files attached to this post.
  by justalurker66
Shortline614 wrote: Thu Jun 10, 2021 2:25 pm Well this is just bizarre...

The cartoon is attached below. To be honest, I don't think it looks good at all. I assume this is targeting politicians rather than shippers who overwhelmingly support CN-KCS.
I'm not sure who CP wants to speak up. They made a STB filing a few days ago containing 131 letters from shippers who do NOT support the voting trust.

The first approval CP needs is from KCS. The STB has not dismissed CP's application yet (although it now lacks a merger agreement with KCS). CP feels that CN interfered with their purchase of KCS and is now "returning the favor" by interfering in the CN merger with KCS.

Of course, they both have a right to express their opinion about each other. Publicly. Get the popcorn, this could be entertaining!
  by pudgym29
Pensyfan19 wrote: Sat May 15, 2021 4:19 pm Anyone else seeing a lot of ads for this?
[image snipped to save bandwidth]
Yes. Now it makes sense. I have completely missed this entire merger manuever. One afternoon about this date I was waiting for a westbound CTA route #66 Chicago bus at the Blue Line "L"(subway) station, and on the big screen advertisement board which typically displays train arrival times, just after one displaying the correct ways to wear a face mask, an ad for Canadian National Rwy. appeared.
  by justalurker66
Oppositions to the use of a voting trust were due Monday (6/28). Amtrak filed an opposition statement based on their proposed use of the KCS track in Louisiana for restored passenger service. CP filed an over 400 page opposition statement rehashing all of their previous comments. Much of CP's comments were based on how the approval of a voting trust would prevent CP from merging from KCS and they are attempting to portray the entire CN/KCS deal as not being in the public interest.

CN's reply to the opposition is due on Tuesday, July 6th - and then the board has no deadline to decide.

CN/KCS have stated that the voting trust is required for their current deal to go forward but they have also stated that if the voting trust is denied there would be a renegotiation of terms. Obviously for KCS stockholders a voting trust is the quickest way to consummation and getting paid - without regard to the public interest of CN taking control (which would be decided over the next year). The concept of a voting trust is to give CN ownership without giving them control. Good on paper but I'm not sure how that works in real life.
  by Shortline614
The stockholder vote will take place on August 19th.

From Trains Magazine:
MONTREAL and KANSAS CITY, Mo. — Kansas City Southern has scheduled an online special meeting of its stockholders for Aug. 19 to vote on the proposed merger with Canadian National.
https://www.trains.com/trn/news-reviews ... er-aug-19/
  by Ridgefielder
I know this has been posted as it's own topic but it seems relevant to this discussion:
https://www.wsj.com/articles/biden-to-t ... _permalink
WASHINGTON—The Biden administration will push regulators to confront consolidation and perceived anticompetitive pricing in the ocean shipping and railroad industries as part of a broad effort to blunt the power of big business to dominate industries, according to a person familiar with the situation.

The administration, in a sweeping executive order expected this week, will ask the Federal Maritime Commission and the Surface Transportation Board to combat what it calls a pattern of consolidation and aggressive pricing that has made it onerously expensive for American companies to transport goods to market.
I realize the STB is non-partisan. However it is also part of the Executive Branch of the US Government. It seems unlikely to me that it would act at cross-purposes to the White House.
  by Shortline614
There was a third Class I interested in Kansas City Southern!

From Trains Magazine:
KANSAS CITY, Mo. — Kansas City Southern was indeed the pretty girl at the dance.

KCS was pursued by at least two other suitors besides Canadian Pacific and Canadian National – including an unnamed Class I system that was interested in acquiring only part of the cross-border railroad — during the lengthy process leading to its planned merger with CN.
https://www.trains.com/trn/news-reviews ... r-suitors/
https://investors.kcsouthern.com/~/medi ... 24-bmk.pdf
  by justalurker66
The war continues - July 12th:
"Canadian National Railway Company and its rail operating subsidiaries (collectively "CN") submit this letter to inform the Board of a significant violation of the Protective Order issued on April 28, 2021.1 The violation was committed by a party of record other than CN or Kansas City Southern ("KCS"). The description below is designated highly confidential so as to limit the ongoing damage from the violation." (the remainder of the document is redacted)

July 13th:
"I am writing on behalf of Canadian Pacific (“CP”) in response to the letter filed by Canadian National (“CN”) late last evening." (the remainder of the document is redacted)

Today CP filed a collection of 90 more opposition letters against CN's voting trust (late filed since such statements were due by June 28th) and additional letters supporting CP's merger with KCS (which should be dead considering there is no valid merger agreement). The bidding war may be over (KCS choosing CN) but the battle of the Canadian railroads lives on.
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