Canadian Pacific Says More Opposition To Proposed Use Of Voting Trust For CN-KCS Merger

Canadian Pacific Railway Ltd. (CP,CP.TO) announced Tuesday that more than 130 stakeholders have filed statements with the Surface Transportation Board (STB) requesting the STB reject Canadian National’s proposed use of a voting trust.

This brings the total letters submitted to more than 960, including 250-plus expressing concern about CN and Kansas City Southern’s (KSU) combination, its use of a voting trust, or both, and more than 730 in support of CP-KCS.

These letters echo those of the Department of Justice (DOJ), which on May 14 filed comments with the STB objecting to CN’s proposed use of a voting trust on the grounds that a CN merger with KCS would pose greater risks to competition than the CP-KCS agreement.

CN’s recent announcement that it intends to “divest” KCS’ 70-mile line between New Orleans and Baton Rouge (but still retain full operating rights) fails to address these concerns.

CP-KCS is the only viable Class 1 combination and has received overwhelming support across the transportation supply chain.

The STB has already approved CP’s use of a voting trust and affirmed KCS’ waiver from the new rail merger rules it adopted in 2001 because a CP-KCS combination is truly end-to-end and pro-competitive. CP stands ready to reengage with KCS.

Last week, CN and KCS had jointly filed with the STB a renewed motion for approval of its voting trust that outlines the case for approval of the voting trust to advance the CN-KCS merger that will enhance competition.

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