Canadian National Railway Co has informed Kansas City Southern it was unlikely to make a new offer ahead of a Friday deadline to beat Canadian Pacific Railway Ltd’s offer, a person familiar with the matter told Reuters Tuesday.
The development will pave way for Kansas City Southern to sign a $27.2 billion deal with Canadian Pacific. This compares with Canadian National’s $29.6 billion offer for the railroad operator.
Canadian National, Canadian Pacific and Kansas City Southern were not immediately available to Reuters request for comment after office hours.
Canadian National had come under pressure from some investors, including hedge fund TCI, to abandon its pursuit of Kansas City Southern, which became fraught with risk after the U.S. Surface Transportation Board shot down its proposed voting trust structure for the deal.
On Sunday, Kansas City said it planned to accept Canadian Pacific Railway Ltd’s $27.2 billion cash-and-stock acquisition offer as superior to its $29.6 billion deal to sell itself to Canadian National Railway Ltd.
CNBC journalist David Faber reported https://twitter.com/davidfaber/status/1437938851616542728 the development first in a tweet Tuesday. (Reporting by Aishwarya Nair and Aakriti Bhalla in Bengaluru and Greg Roumeliotis in New York; editing by Uttaresh.V and Rashmi Aich)