Kansas City Southern’s stock soars after Canadian National’s ‘superior’ bid valued at $33.7 bln

Shares of Kansas City Southern soared 19% toward a record in premarket trading Tuesday, after Canadian National Railway Co. announced what it called a “superior proposal” to acquire the railroad operator in a cash-and-stock bid valued at $33.7 billion. Plans for the buyout bid was previously reported by The Wall Street Journal. which would top Canadian Pacific Railway Ltd.’s previously agreed on buyout bid. Canadian National said its bid is valued at $325 for each Kansas City Southern share outstanding, a 27% premium to Monday’s closing price of $256.40. Under terms of Canadian National’s bid, Kansas City Southern shareholders would receive $200 in cash and 1.059 Canandian National shares for each Kansas City Southern share they own. In March, Kansas City Southern had agreed to be acquired by Canadian Pacific in a deal valuing the stock at $275 each and the company at about $25 billion. Kansas City Southern’s stock has run up 25.6% year to date through Monday, while the Dow Jones Transportation Average has advanced 18.3% and the Dow Jones Industrial Average has gained 11.3%.

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