CP Welcomes KCS Shareholder Vote In Adopting CP-KCS Merger Agreement
CALGARY, AB, December 10, 2021 / PRNewswire / – Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) (“CP”) today welcomed the results of a Kansas City Southern (“KCS”) shareholder vote in favor of the CP-KCS merger proposal.
âThis week, CP and KCS shareholders overwhelmingly supported this transformation proposal to create the firstMexico–Canada railway network â, declared Keith creel, President and CEO of CP. âWith the strong support of shareholders, we are excited to take the necessary steps to complete the CP-KCS Voting Trust transaction, a critical step in the journey to make Canadian Pacific Kansas City a reality. “
CP shareholders voted in favor of the merger at an extraordinary meeting on Wednesday, December 8, 2021. Today, KCS shareholders also voted in favor of a proposed adoption of the CP-KCS merger agreement.
The transaction is expected to be concluded in trust on December 14, 2021. Upon closing of the Trust, KCS common shareholders will receive 2,884 CP common shares and $ 901 in cash for each KCS common share held and KCS preferred shareholders will receive $ 37.50 in cash for each KCS preferred share held and, after the completion of certain stages of the transaction, all shares of the capital stock of KCS’s successor will be placed in trust.
As previously announced on September 15, 2021, CP agreed to acquire KCS in a stock and cash transaction representing an enterprise value of approximately $ 31 billion, which includes the hypothesis of $ 3.8 billion of the outstanding KCS debt. The transaction, which has the unanimous support of both boards of directors, values ââKCS at $ 300 per share, representing a premium of 34%, based on the closing price of the CP on August 9, 2021, the date on which CP submitted a revised offer to acquire KCS, and the unchanged closing price of KCS on March 19, 2021.2
At September 30, 2021, the US Surface Transportation Board (âSTBâ) reaffirmed its approval of the use of a voting trust for the transaction. Voting trust closing conditions include receipt of shareholder approval from both companies as well as satisfaction of other customary closing conditions, including receipt of Mexican regulatory approvals. The required Mexican regulatory approvals were received in November.
The CP’s control over the KCS remains subject to the approval of the STB. At 23 November 2021, the STB formally accepted the CP-KCS control request and issued a procedural timetable. The STB review is expected to be completed in the fourth quarter of 2022.
Additional information regarding the Combination can be found in the Management Proxy Circular dated November 1, 2021, which has been filed with securities regulators in Canada and the United States, including the United States Securities and Exchange Commission (âSECâ).
For more information on the benefits of a CP-KCS combination, visit FutureForFreight.com.
1 Unless otherwise indicated, all figures are in US dollars.
2 Based on the closing KCS share price of $ 224.16 on March 19, 2021 and the closing CP share price of CA $ 91.50 (at the exchange rate of 1.2565) on August 9 2021.
Forward-looking statements and information
This press release includes certain forward-looking statements and forward-looking information (collectively, FLI) regarding CP, KCS and their respective subsidiaries and affiliates. FLI is typically identified by words such as âanticipateâ, âexpectâ, âprojectâ, âwillâ, âestimateâ, âanticipateâ, âplanâ, âintendâ, âtargetâ, “Believe”, “probably” and similar words suggesting future results or statements regarding a prospect. All statements other than statements of historical fact may be FLI.
While we believe the FLI is reasonable based on the information available today and the processes used to prepare it, such statements are not guarantees of future performance, and you are cautioned against over-relying on FLI. By its nature, FLI involves a variety of assumptions, which are based on factors which may be difficult to predict and which may involve known and unknown risks and uncertainties and other factors which may cause the results to occur. actual, activity levels and accomplishments differ materially from those expressed or implied by these FLIs, including, but not limited to the following: the timing and completion of the transaction and the combination of CPs and KCS, including receipt of regulatory approvals and satisfaction of other conditions precedent; the risk of intruders; the achievement of the benefits and synergies expected from the transaction and the timing thereof; the success of integration plans; the focus of management’s time and attention on the transaction and other disruption arising from the transaction; changes in business strategy and strategic opportunities; the actions and decisions of relevant regulatory bodies, including the STB; estimated future dividends; financial strength and flexibility; debt and equity market conditions, including the ability to access capital markets on favorable terms or not at all; cost of debt and equity; potential variations in the price of the CP share which may have a negative impact on the value of the consideration offered to ordinary shareholders of KCS; the ability of the management of CP, its subsidiaries and affiliates to execute key priorities, including those related to the transaction; general social, economic, political, credit and business conditions in Canada, the United States, Mexico and around the world; risks associated with agricultural production such as weather conditions and insect populations; the availability and price of energy raw materials; the effects of competition and price pressures, including competition from other rail carriers, trucking companies and marine shippers in Canada, the United States and Mexico; North American and global economic growth; industry capacity; changes in market demand; changes in commodity prices and demand for commodities; uncertainty surrounding the timing and volumes of cargo shipped via CP and KCS; inflation; geopolitical instability; changes in laws, regulations and government policies, including rate regulation; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; interruption of fuel supplies; uncertainties in investigations, proceedings or other types of claims and disputes; compliance with environmental regulations; labor disputes; changes in labor costs and labor difficulties, risks and liabilities arising from derailments; transport of dangerous goods; the schedule for the completion of capital and maintenance projects; adequacy of budgeted capital expenditures for the achievement of business plans; services and infrastructure; the satisfaction by third parties of their obligations; currency and interest rate fluctuations; exchange rate; the effects of changes in market conditions and discount rates on the financial position of pension plans and investments; trade restrictions or other changes in international trade agreements; the effects of current and future multinational trade agreements on the level of trade between Canada, the United States and Mexico; climate change and the market and regulatory responses to climate change; ability to meet commitments and aspirations related to reducing greenhouse gas emissions and other climate-related goals; planned commissioning dates; success of hedging activities; operational performance and reliability; approvals and support from customers, regulators and other stakeholders; regulatory and legislative decisions and actions; the negative impact of any termination or revocation by the Mexican government of Kansas City Southern of Mexico, SA de CV Concession; public opinion ; various events that could disrupt operations, including severe weather events, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and government response to those here, and technological changes; acts of terrorism, war or other acts of violence or crime or risk of such activities; the limits of insurance coverage; significant adverse changes in economic and industrial conditions, including the availability of short and long term financing; and the pandemic created by the COVID-19 epidemic and its variants, and the resulting effects on economic conditions, the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses of governments and institutions, and disruptions to global supply chains.
We caution that the above list of factors is not exhaustive and is established as of the date hereof. Additional information on these and other assumptions, risks and uncertainties can be found in the reports and documents filed by CP and KCS with securities regulators in Canada and the United States, including any circulars. proxy, prospectus, material change report, management information circular or registration statement filed, or to be filed, in connection with the transaction. Reference should be made to âRisk Factorsâ and âManagement’s Discussion and Analysis of Financial Condition and Results of Operations â Forward-Looking Statementsâ in CP and KCS annual and interim reports on the forms. 10-K and 10-Q. Due to the interdependencies and interrelationship of these and other factors, the impact of any assumption, risk or uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to publicly update or revise any FLI, whether as a result of new information, future events, or otherwise. All FLIs in this press release are expressly qualified in their entirety by these caveats.
About Canadian Pacific
The Canadian Pacific Railway (TSX: CP) (NYSE: CP) is a transcontinental railway in Canada and United States with direct connections to the main ports on the west and east coasts. CP provides North American customers with competitive rail service with access to key markets around the world. CP grows with its customers, offering a range of freight transportation services, logistics solutions and supply chain expertise. Visit www.cpr.ca to see the rail benefits of CP. CP-IR
SOURCE Canadian Pacific