JayBee wrote: ↑Thu Apr 29, 2021 11:18 amCP has announced that they will not be sweeting the deal.
That attitude may change. It depends on how accepted the CN offer becomes. KCS may use the CN offer to leverage a higher price, but the leverage only works if CN's offer is viable.
JayBee wrote: ↑Thu Apr 29, 2021 11:18 amIf the voting trust is approved, but the deal falls through because of STB imposed conditions, I wonder if they would try to sell KCS to someone like G&W. Or could they spin it off to CN's shareholders?
The first question for G&W (and Watco and other regionals) would be do they want to be a Class I. It would probably be better for the industry for KCS to be operated by people with railroad experience instead of investment funds.
If CP-KCS fails to receive STB approval I would not expect CN-KCS to receive approval. CP-KCS is a much easier deal to approve.
If the KCS board chooses the unsolicited CN offer over the CP offer and they manage to get to the level of having a voting trust before the STB shuts down the deal then I can see some deal worked out with CP. I expect egos would probably get in the way of economics and CN would try to sell to an investment fund or break up KCS before selling to CP. But at the end of the day it would not be CN's choice! The whole point of a voting trust is to allow KCS to operate independently of CN (or CP) until the STB approves the transfer of control. If the STB does not approve the transfer of control it would be up to the voting trust who they would approach to buy the company from CN (or CP). Any attempt by CN to steer the trust away from CP would not be allowed.
Voting trusts are good if there is a reasonable chance of final STB approval but are messy if the deal eventually falls through.
JayBee wrote: ↑Fri Apr 30, 2021 11:33 amAnybody think that CN lawsuit against the STB is more about the KCS acquisition than about the Massena Line?
Not me. I believe that lawsuit is about the Massena Line. The STB rejected a provision in the line sale that led to the deal falling through. CN and CSX believe they had the right to make that provision - CN did not object to the provision.
I do not expect the STB to be swayed by filed lawsuits. If a court makes a decision against the STB's ruling then there may be an effect on future STB rulings - but the proposed CN-KCS deal is a merger, not a line sale between two companies that would continue to exist and compete after the sale. The current lawsuit would not apply.