-=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.

=Canadian Natl Rail (CNI) reported earnings on Tue 24 Apr 2018 (b/o)

Canadian Natl Rail reports EPS in-line, beats on revs; lowers FY18 EPS, in-line 

• Reports Q1 (Mar) earnings of CC$1.00 per share, excluding non-recurring items, in-linewith the Capital IQ Consensus of CC$1.00; revenues fell 0.4% year/year to CC$3.19 bln vs the CC$3.16 bln Capital IQ Consensus. 
  • Revenues declined for grain and fertilizers (11 per cent), forest products (six per cent), automotive (four per cent), petroleum and chemicals (three per cent), and other revenues (two per cent). Revenues increased for intermodal (10 per cent), coal (10 per cent), and metals and minerals (seven per cent). The decrease in revenues was mainly attributable to reduced RTMs resulting from challenging operating conditions, including harsh winter weather and low network resiliency, as well as the negative translation impact of a stronger Canadian dollar, partly offset by higher applicable fuel surcharge rates and freight rate increases.
  • RTMs, measuring the relative weight and distance of rail freight transported by CN, declined by four per cent from the year-earlier quarter. Rail freight revenue per RTM increased by four per cent over the year-earlier period, mainly driven by favourable changes in traffic mix, a decrease in the average length of haul, higher applicable fuel surcharge rates and freight rate increases, partly offset by the negative translation impact of a stronger Canadian dollar.
• Co issues in-line guidance for FY18, lowers EPS to CAD$5.10-5.25 from $5.25-5.40 vs. C$5.14 Capital IQ Consensus Estimate. Due to weaker than expected RTMs in the first quarter and a longer than anticipated construction period needed for significant infrastructure capacity projects in 2018