KANSAS CITY — Kansas City Southern (KCS) has scheduled a virtual special meeting of stockholders on Aug. 19 to vote on the proposed merger with CN.
All stockholders of record of KCS common stock and KCS 4% non-cumulative preferred stock as of close of business on July 1, are allowed to vote at the special meeting.
“We are thrilled to be taking this important next step and giving KCS stockholders the opportunity to vote on the creation of the premier railway for the 21st century,” said JJ Ruest, president and chief executive officer of CN. “Numerous stakeholders of both companies have voiced overwhelming support for this compelling combination, and we look forward to delivering the many benefits of this pro-competitive transaction to them. This combination delivers significant value to KCS stockholders along with the opportunity to participate in the significant upside of the combined company.”
As previously announced on May 21, under the terms of the agreement, which was unanimously approved by the board of directors, KCS stockholders will receive $200 in cash and 1.129 shares of CN common stock for each KCS common share, with KCS stockholders expected to own approximately 12.65% of the combined company.
KCS’ preferred stockholders will receive $37.50 in cash for each preferred share.
Additional information regarding the combination can be found in the definitive proxy statement that has been filed with the US Securities and Exchange Commission.
“The filing of the definitive proxy statement represents an important milestone as we work toward completing this transaction,” said Patrick J. Ottensmeyer, president and CEO of KCS. ”By joining with CN, KCS will provide our customers access to new single-line transportation services at the best value for their transportation dollar, while increasing competition among the Class 1 railroads. Together, CN and KCS will be positioned to deliver on the transaction’s powerful potential to create new growth opportunities for our customers, employees, labor partners, communities and stockholders.”
The KCS board of directors unanimously recommends that stockholders vote “FOR” the merger agreement with CN and the other proposals outlined in the definitive proxy statement.
CN will acquire KCS shares and place them into a voting trust if such trust is approved by the Surface Transportation Board. KCS stockholders will receive the merger consideration immediately upon the closing into CN’s voting trust, which is expected to be in the second half of 2021. Following this step, the STB and other regulatory authorities will complete their review of CN’s control of KCS. Upon approval, the completion of the transaction to take the KCS shares out of the voting trust is expected to take place in the second half of 2022.
CN’s voting trust is an integral component of the CN-KCS combination. It prevents premature control of KCS, allows KCS to maintain independence and protects KCS’ financial health during the STB’s review of the ultimate combination of CN and KCS.
CN and KCS are confident that the voting trust meets all the standards set forth by the STB and believe that, after a fair and thorough review by the STB, it should be approved.
CN’s prospectus and KCS’ definitive proxy materials can be found on the SEC’s website at www.sec.gov.