K.C. Southern rejects Canadian Pacific bid

Kansas City Southern railroad is trying to keep its $33.6 billion merger with Canadian National on track by rejecting a competing $31 billion bid from rival Canadian Pacific earlier this week.

Kansas City Southern said Thursday that its board unanimously decided to continue backing Canadian National’s higher offer. KCS shareholders are scheduled to vote whether to accept CN’S offer on Thursday, but the U.S. railroad said it may now delay that vote if the U.S. Surface Transportation Board doesn’t issue its decision on a key part of Canadian National’s acquisition plan before Tuesday.

The STB said earlier this week that by Aug. 31, it will issue its decision on Canadian National’s proposal to use a voting trust that would acquire Kansas City Southern and hold the railroad during the STB’S lengthy review of the overall deal. Failure to get that key approval would likely derail the deal.