Canadian National responds to Canadian Pacific's hostile bid for Kansas City Southern, calling it 'inferior'

Canadian National Railway Co.
CNI,
-0.28%

CNR,
-0.92%

called rival Canadian Pacific Railway Co.’s
CP,
-0.85%

CP,
-1.33%

new unsolicited buyout bid for Kansas City Southern
KSU,
+7.33%

“inferior” to the terms of the CN-KCS merger deal, despite CP’s call that its new bid was “superior.” CN noted that the merger deal that KCS agreed on back in May was valued at $33.6 billion, including debt, while the bid CP submitted was valued at $31 billion. CP argued that a CP-KCS combination offers “significantly higher regulatory certainty” than a CN-KCS combination. CN responded by saying its merger deal is currently under review by the Surface Transportation Board (STB), following a comment period which resulted in “overwhelming support” from customers, suppliers, elected officials, organized labor, local communities and stakeholders. “CN and KCS’ agreed transaction remains superior and the best option for both companies’ stakeholders to deliver on a combination that will enhance competition and provide new servicing options for customers,” CN said in a statement. CN shares rose 0.4% in morning trading, CP’s stock fell 1.0% and KCS shares rallied 7.8%. Meanwhile, the Dow Jones Transportation Average
DJT,
+2.13%

ran up 1.2% and the Dow Jones Industrial Average
DJIA,
+0.51%

tacked on 72 points, or 0.2%.

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