(Reuters) Canadian Pacific Railway Ltd. has raised its offer by up to $2 billion to acquire Kansas City Southern ahead of its rival Canadian National Railway Co.
The sweetened bid means that Canadian Pacific is now offering $27.29 billion for Kansas, which is still below the $29.56 billion offered by Canadian National.
The Canadian Pacific offer consists of $90 in cash and 2.884 of its shares for each stock of Kansas or a value of $300 per share. Canadian National offered $325 per Kansas City share.
The offer is a change of stance by Canadian Pacific, the country’s second-largest railroad operator after it said in April it will not raise the bid.
Canadian Pacific has criticized Canadian National’s bid saying it will reduce competition and adversely affect shippers, requesting for the rejection of the rival’s offer.
Kansas has set a shareholder vote on August 19 to determine whether to approve the deal with Canadian National.
The acquisition of Kansas City by either CP or CN would create the first direct railway network linking Canada, the U.S., and Mexico.
KSU: NYSE is up +6.31%, CP: TSE closed down -0.87%.
