Private Equity Firms Eye Kansas City Southern Takeover

Bid, DENIED!

https://trn.trains.com/news/news-wire/2 ... y-railroad

Kansas City Southern has turned down the latest bid to buy the railroad, the Wall Street Journal is reporting. In a paywalled article, the Journal reports that Global Infrastructure Partners and Blackstone Group Inc.’s infrastructure arm had offered $208 a share, or roughly $20 billion, for the Class I railroad, which felt the takeover bid undervalued the railroad. The two sides are reportedly no longer in discussions.

The bid from Global and Blackstone was reported last week [see “Digest: Investment groups make new offer to buy Kansas City Southern,” Sept. 3] and was the second after an offer was rebuffed earlier this year.

KCS, the smallest of the U.S. Class I railroads, said Wednesday that it expects 2020 earnings per share to be similar to those in 2019.

A bad date; we've all had 'em

I must wonder to what extent Inter-American trade "played" first in the "target" by private equity, and now the "walk". Was the bet on Mexican political stability just too long a shot.

I hold that the Port of Lazaro Cardenas, Mich could be a "gold mine" with its lower labor costs and with KCS-M "the only game in town". But if the possibility of theft while in transit and too many "greasy palms" about, the private equity outfits concluded "it's not worth it".

"Next stop" for Blackstone could be Pan Am (B&M) - a sick road waiting to be chopped up and become tech industry "angel $$$".

Now a moot point with the UP Borg interest?

Could this apparent reality be what is needed to get Lazaro Cardenas. and by extension KCS-M in the game?:

https://www.wsj.com/articles/shipping-c ... lewebshare

Fair Use:

Some container lines and their importing customers are looking for alternate paths to get around bottlenecks at the main U.S. trade gateways in Southern California, where an armada of cargo vessels is anchored offshore at the congested seaports.

Shipping lines have started moving some operations to smaller ports and have canceled some sailings altogether to avoid the backups that have tied up dozens of ships and hundreds of thousands of containers stuffed with goods off the ports of Los Angeles and Long Beach.

If the "Sons of El Chapo" could keep their cap pistols holstered, the maritime companies might consider Mexico's level of political instability the lesser of evils over having your vessel anchored outside a West Coast port awaiting a berth for stevidorage.

Mr Norman, the cartels would take great interest of a deep water port in Mexico,as a means to move their product in US bound containers.....

As often the case, Mr. Backshop, I think we are in agreement regarding this point.

I trust it's noted that every time, I've addressed Lazaro Cardenas, I have used the term "political instability". That includes every level of government down there appears under the influence of "Sons of El Chapo" (for all I know, he himself still calls the shots "from the inside" of the "Supermax" where he resides on our dime).

The drug trafficking argument comes up every time LC or even Puerto Colonet gets brought up, but I have to question how much of that is just smoke and mirrors to distract from the real issue, which is the stranglehold that the US dockworker unions have on the existing ports.

If we actually allowed free trade or movement of goods across the Canadian or Mexican border, that power would diminish for the dockworkers. It's a net neutral for the US railroad unions, because those containers will still flow across US rails regardless if they're offloaded in Baja, Central Mexico or British Colombia.

The Cartels are firmly rooted at the port,You would need to inspect EVERY container from that port,remember the Cartels will find ways to
influence Mexican Customs officers at the port'

Mr. Olesen, Puerto Colinet?

Something here doesn't add up.

This photo shows an active maritime port complete with rail service.

Funny though, there is no rail service whatever within the state of Baja California.

True, someone has "visions" - including building a "UP interchange friendly" Ferromex line, but who has them about a "corruption and violence free zone"?

disclaimer: author long UNP

As long as Mexico remains Mexico, there will never be a such thing as violence and corruption free.

There's been talk of expanding the port and building around 200 miles of rail between PC to connect to the Sunset Route on and off for 20 years, plus an extension of the I-11 corridor to the border to support truck traffic.

Mexico iced the plan back in 2012, but plans like this never really ever die forever. Chinese investment was behind the latest incarnation, and I'm sure they could easily throw enough money at Mexico to make it happen if they want to break the logjams at Long Beach, Oakland, etc...

Likely correct, Mr. Olesen.

Fortunately, I did my "joyriding" in Mexico first during '70, then '73, and finally '75.

Anymore? not on my life.

My railroad credentials got me invited into the cab of the GE U-30's at Monterey handling the overnight train to Mexico DF. I was first horrified to see the primitive "dead man's pedal" enabled with a fuesee, then "time to pass the paper bag that holds the bottle".

We made it to Mexico DF; I never told the guy I was with.

I'm sure, however, the KCS has brought US level of discipline to the NdeM, I'll bet today, an Engine crew "pulling that" would be Held From Service quicker than it would take to type up the letters.