THE Canadian National Railway (CN) has expressed disappointment with the US Surface Transportation Board (STB) ruling preventing its planned US$30 billion takeover of the Kansas City Southern (KCS) railway as a major CN shareholder demanded the CN CEO be sacked.
'We are disappointed in the STB's decision and we are evaluating the options available to us in light of the STB's decision,' said CN.
'We remain confident that our pro-competitive, end-to-end combination is in the public interest and that it would offer unparalleled opportunities and benefits for customers, employees, the environment and the North American economy,' it said.
The STB ruling is a victory for CN's rival, the Canadian Pacific Railway (CP) that has launched a relentless campaign to prevent he take over.
Canadian Pacific also gave Kansas City Southern another chance to accept its previously rejected $27 billion acquisition offer after US regulators dealt a blow to a proposed KCS link-up with rival CN. But CP told KCS it must accept the offer by September 12 or it will drop any pursuit of the company.
Said CP chief executive Keith Creel: 'Our appetite and willingness to keep our offer on the table forever does not exist. My willingness to offer $300 per share is not going to be the same as September 12.'
But an influential CN shareholder, London-based TCI Fund Management, which owns more than five per cent of CN, said it is imperative that the railway abandon its plan to take over KCS and sack its CEO.
If Canadian National persists in the face of the regulator's opposition, it runs the risk of reputational damage and financial disaster, the fund said in a letter to CN chairman Robert Pace.
'From the start, it has been clear and obvious the bid would fail. That the board sanctioned the bid, together with potential fees of C$2 billion (US$1.58 billion), is an egregious failure of oversight and there must be accountability,' TCI chief executive Chris Hohn.
CN chief executive Jean-Jacques Ruest should resign immediately; they urged the board to replace Ruest with Jim Vena, a former Union Pacific executive. They also called for a board seat for Gilbert Lamphere, who has previously been on the boards of Illinois Central Railroad, Canadian National and CSX Corp.
Canadian National's board is now faced with a decision to withdraw from the merger agreement, appeal the ruling, or try to proceed without a voting trust. But TCI argued that the STB's rejection of the voting trust made it clear that regulators simply do not want the deal to happen.
SeaNews Turkey
'We are disappointed in the STB's decision and we are evaluating the options available to us in light of the STB's decision,' said CN.
'We remain confident that our pro-competitive, end-to-end combination is in the public interest and that it would offer unparalleled opportunities and benefits for customers, employees, the environment and the North American economy,' it said.
The STB ruling is a victory for CN's rival, the Canadian Pacific Railway (CP) that has launched a relentless campaign to prevent he take over.
Canadian Pacific also gave Kansas City Southern another chance to accept its previously rejected $27 billion acquisition offer after US regulators dealt a blow to a proposed KCS link-up with rival CN. But CP told KCS it must accept the offer by September 12 or it will drop any pursuit of the company.
Said CP chief executive Keith Creel: 'Our appetite and willingness to keep our offer on the table forever does not exist. My willingness to offer $300 per share is not going to be the same as September 12.'
But an influential CN shareholder, London-based TCI Fund Management, which owns more than five per cent of CN, said it is imperative that the railway abandon its plan to take over KCS and sack its CEO.
If Canadian National persists in the face of the regulator's opposition, it runs the risk of reputational damage and financial disaster, the fund said in a letter to CN chairman Robert Pace.
'From the start, it has been clear and obvious the bid would fail. That the board sanctioned the bid, together with potential fees of C$2 billion (US$1.58 billion), is an egregious failure of oversight and there must be accountability,' TCI chief executive Chris Hohn.
CN chief executive Jean-Jacques Ruest should resign immediately; they urged the board to replace Ruest with Jim Vena, a former Union Pacific executive. They also called for a board seat for Gilbert Lamphere, who has previously been on the boards of Illinois Central Railroad, Canadian National and CSX Corp.
Canadian National's board is now faced with a decision to withdraw from the merger agreement, appeal the ruling, or try to proceed without a voting trust. But TCI argued that the STB's rejection of the voting trust made it clear that regulators simply do not want the deal to happen.
SeaNews Turkey
