-=Kansas City Southern (KSU): Canadian National (CNI) makes a superior proposal of $325/share

 Kansas City Southern: Canadian National (CNI) announced that it has made a superior proposal to combine with Kansas City Southern (KSU) in a cash-and-stock transaction valued at $33.7 billion, or $325/share

Under the terms of the superior proposal made today to KCS' Board of Directors, following closing into a voting trust, KCS shareholders will receive $200 in cash and 1.059 shares of CN common stock for each KCS common share. Based on yesterday's closing price of CN shares, CN's proposal is valued at $325 per KCS share. This represents an implied premium of 45% when compared to KCS' unaffected closing stock price on March 19, 2021 and an 21% improvement over the current value of KCS' agreement with Canadian Pacific Railway (CP). With greater than two-times more cash consideration, CN's superior proposal delivers greater value and certainty to KCS shareholders, as well as participation in the significant upside of the combined company.

CN currently estimates that the combination would result in EBITDA synergies approaching $1 billion annually, with the vast majority of synergies coming from additional revenue opportunities. CN anticipates the transaction to be accretive to CN's adjusted diluted earnings per share in the first full year following CN assuming control of KCS. These are conservative estimates based on publicly available information and would be refined during the due diligence process.