Canadian Pacific says open to re-engaging with Kansas City, does not raise bid By Reuters

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© Reuters. FILE PHOTO: A freight train of the Kansas City Southern (KCS) Railway Company is pictured in Toluca, Mexico October 1, 2018. REUTERS/Edgard Garrido/File Photo

(Reuters) – Canadian Pacific (NYSE:) Railway said on Friday it was willing to re-engage with Kansas City Southern (NYSE:), without raising its offer for the U.S. railroad operator, hoping that rival Canadian National Railway’s bid would be shot down by a U.S. transport regulator.

“CP anticipates being available to engage with KCS to enter into another agreement to acquire KCS,” Canadian Pacific said, adding that it would be in “substantially the form of the merger agreement previously entered.”

Kansas City Southern, which last week accepted Canadian National’s offer, was not immediately available for comment.

The two Canadian companies are seeking to buy the U.S. firm to create the first railway spanning the United States, Mexico and Canada, as they stand to benefit from a pick-up in trade.

Canadian Pacific’s and Canadian National’s proposals, both in cash and stock, were about $29 billion and $33.6 billion, respectively.

Canadian Pacific on Thursday reiterated its commitment to buy Kansas City Southern, saying their merger agreement had already been approved by the U.S. Surface Transportation Board (STB).

Canadian National’s deal has recently run into regulatory hurdles, with the STB having denied its motion for approval of a voting trust earlier this week. The company said it was preparing a renewed motion for the STB to approve its proposed voting trust to be filed on or before May 21.

Canadian Pacific said on Friday it believed Canadian National cannot demonstrate that its proposed use of a voting trust would be “consistent with the public interest.”

The U.S. Department of Justice had also said last week that Canadian National’s bid for Kansas City appears to pose greater risks to competition.

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