Canadian Pacific to Buy Kansas City Southern

[C855B]

... The only winner in mergers, is Wall Street.

Maybe, maybe not. I've been watching activity including other RRs since the announcement. Even given the tender offer ~40% over the share price the previous day, the market has been lukewarm. Frequently, full buy-outs like this spike over the offered price. Ordinary shares of KSU since have been holding at $250/share despite the tender of $275. Yes, there was the $30 jump over Friday's close which made good money, but there's enough of a gap there to indicate reservation whether the deal will go all the way.

Conversely, UP dropped 3% Monday on the news yet regained all of it and then some as of this morning. Consensus money seems to be betting against the merger.

My regret is not buying KCS a couple of decades ago, back when it was literally a penny stock trading at less than a buck for years. Apparently my crystal ball must have been down at the time. 

[davefoxx]

My regret is not buying KCS a couple of decades ago, back when it was literally a penny stock trading at less than a buck for years. Apparently my crystal ball must have been down at the time. 

Oof!  How about those early Bitcoin investors?

DFF

[Missaberoad]

FWIW... Alberta oil producers and propane producers are very excited about the combination.
It should make it easier to ship their product to the gulf coast and to mexico respectively.

Not every merger is Penn Central or UP/SP. Some have been quite successful, and improved service to customers.

On the same line of thought, service degradation isn't a direct cause of merger. The two can be independent of one another.

All that being said, I can see competing lines contesting the merger in order to get concessions, simply to better their position.

[C855B]

Oof!  How about those early Bitcoin investors?

There is not enough antacid in the world to weather the arbitrary ups and downs of Bitcoin. But yeah, crystal ball and all that.

[Lenny53]

All that being said, I can see competing lines contesting the merger in order to get concessions, simply to better their position.

Yes, this is the game in play.  Finger Lakes, (and Susie Q), won a concession to gain interchange with CN they don't currently don't have as a condition of the CSX / CN interchange moving 25 miles south on the Massena Line.  CSX balked.

[Ed Kapuscinski]

Breaking news: https://www.tomorrowtides.com/cp-kcs-deal-canned.html

[Lenny53]

Breaking news: https://www.tomorrowtides.com/cp-kcs-deal-canned.html

Well played you magnificent bugger! 

[eric220]

Breaking news: https://www.tomorrowtides.com/cp-kcs-deal-canned.html

Who knew? Haven’t seen that play in a long time. Very nice.

[Lenny53]

. . . .  and the boohooing has begun

https://www.trains.com/trn/news-reviews/news-wire/four-class-i-railroads-urge-more-stringent-regulatory-review-of-cp-kcs-merger/

[kscessandriver]

. . . .  and the boohooing has begun

https://www.trains.com/trn/news-reviews/news-wire/four-class-i-railroads-urge-more-stringent-regulatory-review-of-cp-kcs-merger/

As it should, that’s why the process is set up the way it is. Public comment periods are just that, comment periods to allow people to weigh in. If you thought the other Class 1s would just roll over, I’ve got ocean front property for you in Vegas

[Lenny53]

As it should, that’s why the process is set up the way it is. Public comment periods are just that, comment periods to allow people to weigh in. If you thought the other Class 1s would just roll over, I’ve got ocean front property for you in Vegas

Shippers seem mostly in favour of the transaction, other class 1s seem to fear more competition.

https://www.newswire.ca/news-releases/canadian-pacific-kansas-city-southern-receive-widespread-support-for-creating-first-u-s-mexico-canada-rail-network-886389708.html

[Ed Kapuscinski]

I've never seen a situation where industry consolidation in a healthy industry has ever benefited customers.

A large marketplace is a vibrant one.

[kscessandriver]

I've never seen a situation where industry consolidation in a healthy industry has ever benefited customers.

A large marketplace is a vibrant one.

Exactly. The argument right now isn't if the merger should happen, but what STB rules should apply to the merger. Because of KCS size, they were told they would use pre-2001 merger rules, but in hindsight, now many shippers and other companies are asking for the more modern rules to apply.

Whatever happens, it will be years before the merger happens or falls apart.

[Lenny53]

2001 waiver remains in force

https://prod.stb.gov/news-communications/latest-news/pr-21-20/

[Narlie]

Looks like KCS is going for CN!!