Canadian Pacific Kansas City Limited Stock Price, News & Analysis

On April 26, 2021, Canadian Pacific Railway Limited (CP) expressed concerns about Canadian National's (CN) proposed acquisition of Kansas City Southern (KCS). CP argues that the merger would significantly reduce competition, particularly across key routes and corridors that both railroads share. CP claims that the loss of competition would impact shippers' options, with a Cowen survey indicating 45% of shippers view the CN merger negatively. CP emphasizes that the CN proposal is misaligned with regulatory perspectives and poses risks for the competitive landscape. The letter advocates for CP's transaction with KCS as a superior option.

Canadian Pacific Railway (CP) acknowledges Canadian National's (CN) request to name David Starling as trustee in its unsolicited bid for Kansas City Southern (KCS). While CP has no objection to this choice, it highlights significant differences between the two proposals. CP points out that CN's use of a voting trust does not resolve competitive concerns between CN and KCS, which the Department of Justice has flagged. CP's transaction with KCS is expected to result in fewer regulatory challenges due to its alignment with existing waivers.

On April 24, 2021, Canadian Pacific Railway Limited (TSX: CP) addressed Kansas City Southern's (KCS) review of Canadian National's (CN) unsolicited proposal. CP emphasized that KCS's board is fulfilling its obligations under their merger agreement by evaluating CN's offer. CP's President and CEO, Keith Creel, expressed confidence that KCS will recognize the risks of the CN proposal compared to the benefits of a CP-KCS merger. CP highlighted various concerns regarding CN's offer, including regulatory risks and KCS's shareholders' interests in a potentially inferior deal.

Canadian Pacific Railway Limited (TSX: CP) announced that the Surface Transportation Board (STB) confirmed the applicability of a 2001 waiver for the proposed merger with Kansas City Southern (KCS). The STB's decision indicates that the merger, which would form the smallest Class I railroad by U.S. operating revenues, has minimal competitive overlap. With over 415 stakeholders supporting the merger, CP aims to create a competitive rail network across North America. The STB review is expected to be completed by mid-2022, pending regulatory and shareholder approvals.

On April 23, 2021, Canadian Pacific Railway (CP) announced that 416 shippers and stakeholders filed statements with the Surface Transportation Board (STB) supporting its combination with Kansas City Southern (KCS). An additional 48 statements favored CP's proposal over the unsolicited bid from Canadian National (CN). The supporters believe that the combination will enhance competition and improve service reliability. CP is seeking STB approval, expected by mid-2022, along with shareholder approvals. The merger is seen as beneficial for all stakeholders, potentially invigorating transportation competition.

The North Dakota Grain Dealers Association has reiterated its support for the Canadian Pacific (CP) and Kansas City Southern (KCS) combination, opposing the bid from Canadian National (CN). In a letter to the Surface Transportation Board, the NDGDA emphasized the benefits of the CP-KCS merger, which would provide expanded market access for North Dakota grain shippers and improve competition against larger rail carriers. The association warns that the CN bid could hinder market expansion and diminish competition for grain shippers in North Dakota, who rely heavily on rail for over 80% of grain movement.

Canadian Pacific Railway reported first-quarter revenues of $1.96 billion, a 4% decrease from $2.04 billion last year. Despite this decline, diluted EPS rose 51% to $4.50, while adjusted diluted EPS increased 1% to $4.48. The operating ratio was 60.2%, an increase of 100 basis points, though adjusted OR improved 70 basis points to 58.5% after excluding acquisition-related charges. The company broke multiple records during the quarter, including in Canadian grain and automotive revenue. Guidance for 2021 indicates double-digit adjusted EPS growth.

On April 21, 2021, Canadian Pacific Railway Limited (CP) announced the successful passing of all resolutions during its annual meeting, including the election of 11 directors and a five-for-one share split. Directors received an average approval of 95.62%, with the share split garnering 99% approval. The share split, effective for shareholders recorded by May 5, 2021, will increase shares from approximately 133 million to 666 million, enhancing liquidity without altering ownership proportions. The new shares will be distributed on May 13, 2021, with no immediate tax implications for shareholders.

Canadian Pacific Railway (CP) has filed a letter with the Surface Transportation Board, urging prompt approval of its acquisition of Kansas City Southern (KCS) without further voting trust requirements. Over 400 stakeholders support the CP-KCS combination, emphasizing its benefits for competition and public interest. CP argues that a competing bid from Canadian National (CN) is inferior and would harm competition by reducing routing options. The letter advocates for the regulatory treatment of the CP-KCS transaction to reflect its straightforward nature, contrasting it with the complexities and potential anticompetitive effects of the CN proposal.