CALGARY, AB, July 29, 2021 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP) (NYSE: CP) ("CP") today announced it has
filed a proxy statement asking Kansas City Southern ("KCS")
shareholders to vote "AGAINST" the proposed Canadian National-KCS
combination at the KCS special meeting of stockholders on
Aug. 19, 2021 so that CN's proposed
acquisition can be decided at a later date, when more information
will be available to KCS's stockholders.
"CP has always said it wanted to do a friendly deal with KCS and
that remains true," said Keith
Creel, CP President and Chief Executive Officer. "CP would
have preferred not to appeal directly to KCS's stockholders, but
given the impending vote on CN's proposal, we believe we have no
choice. What we are doing here is simply contesting the vote on the
CN-KCS proposal because a 'yes' vote now would lock KCS
stockholders in until February 2022,
instead of their being free to consider other, better, options.
"We want to ensure KCS stockholders are aware that a vote today,
without the benefit of an STB decision on the CN voting trust
proposal and without a chance to consider other proposals until the
spring of next year, would not be in their best interests," Creel
added.
While the outcome of the STB's decision on the CN voting trust
cannot be known at this stage, KCS stockholders should be aware
that voting to approve the CN-KCS merger while there is this level
of regulatory uncertainty comes with severe consequences that are
not in the KCS stockholders' best interests.
Under the terms of KCS's merger agreement with CN, following
receipt of KCS stockholder approval of the merger, KCS will no
longer be permitted to consider any alternative proposals. KCS also
will be unable to terminate its merger agreement with CN in
connection with any proposal that is superior to the CN-KCS merger.
KCS stockholders will not have another opportunity to vote on the
merger.
Effectively, this means that if STB voting trust approval is not
received and/or continues to be litigated, and KCS stockholders
have already approved the CN-KCS merger, KCS will be locked into
the proposed CN merger until Feb. 21,
2022, the end date under the CN merger agreement, instead of
being free to pursue other opportunities that may be in the best
interests of KCS stockholders.
Until there is more certainty on how the STB will decide on CN's
voting trust, KCS stockholders should not be asked to vote in favor
of the CN-KCS merger and foreclose their opportunity to consider
other potential superior proposals.
CP-KCS remains the only viable Class 1 combination
The
STB has already approved CP's use of a voting trust and affirmed
KCS's waiver from the new rail merger rules it adopted in 2001
because a CP-KCS combination is truly end-to-end, pro-competitive,
and the only viable Class 1 combination.
As previously announced, CP continues to pursue its application
process to acquire KCS so that the pro-competitive CP-KCS
combination can be reviewed by the STB and implemented without
undue delay, in the event that KCS's agreement with CN is
terminated or CN is otherwise unable to acquire control of KCS.
For more information on the benefits of a CP-KCS combination and
the risks that a CN-KCS transaction would pose to the railway
industry and North America, visit
FutureForFreight.com.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
CP, together with the other participants named in this news
release (collectively, "Canadian Pacific"), has filed a preliminary
proxy statement and accompanying BLUE proxy card with the
Securities and Exchange Commission (the "SEC") to be used to
solicit votes of the stockholders of KCS, against the proposal to
adopt the Agreement and Plan of Merger, dated as of May 21, 2021 (the "CN Merger Agreement"), by and
among Canadian National Railway Company, a Canadian corporation
("CN"), Brooklyn Merger Sub, Inc., a Delaware corporation and a direct wholly owned
subsidiary of CN, and KCS. The definitive proxy statement
will be sent to the stockholders of KCS once it becomes
available.
INVESTORS AND STOCKOLDERS OF KCS ARE URGED TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT KCS, CANADIAN
PACIFIC, THE TRANSACTIONS CONTEMPLATED BY THE CN MERGER AGREEMENT
AND RELATED MATTERS AND DEVELOPMENTS. THE PROXY STATEMENT AND
SUCH OTHER PROXY MATERIALS, WHEN FILED WITH THE SEC, WILL BE
AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT WWW.SEC.GOV.
IN ADDITION, INVESTORS AND STOCKHOLDERS WILL BE ABLE TO OBTAIN FREE
COPIES OF THE PROXY STATEMENT AND OTHER MATERIALS FILED WITH THE
SEC ONLINE AT INVESTOR.CPR.CA, OR UPON REQUEST TO CANADIAN
PACIFIC'S PROXY SOLICITOR, INNISFREE M&A INCORPORATED, AT (212)
750-5833 OR TOLL-FREE AT (877) 456-3442.
PARTICIPANTS IN THE SOLICITATION
The participants in the proxy solicitation are anticipated to be
CP, Isabelle Courville, Edward R. Hamberger, Matthew H. Paull, Keith
E. Creel, Nadeem S. Velani
and John K. Brooks. As of the
date of this news release, none of CP, Ms. Courville, Mr.
Hamberger, Mr. Velani or Mr. Brooks are the beneficial owner of any
shares of common stock, par value $0.01 per share, or 4% noncumulative preferred
stock, par value $25.00 per share, of
KCS (collectively, the "Shares"). Mr. Paull is the beneficial owner
of 34 Shares, and Mr. Creel is the beneficial owner of seven
Shares. Information about CP's directors and executive
officers may be found in its 2021 Management Proxy Circular, dated
March 10, 2021, as well as its 2020
Annual Report on Form 10-K filed with the SEC and applicable
securities regulators in Canada on
February 18, 2021, available free of
charge on its website at investor.cpr.ca and at www.sedar.com and
www.sec.gov.
FORWARD-LOOKING STATEMENTS AND INFORMATION
This news release includes certain forward-looking statements
and forward looking information (collectively, FLI). FLI is
typically identified by words such as "anticipate", "expect",
"project", "estimate", "forecast", "plan", "intend", "target",
"believe", "likely" and similar words suggesting future outcomes or
statements regarding an outlook. All statements other than
statements of historical fact may be FLI.
Although we believe that the FLI is reasonable based on the
information available today and processes used to prepare it, such
statements are not guarantees of future performance and you are
cautioned against placing undue reliance on FLI. By its
nature, FLI involves a variety of assumptions, which are based
upon factors that may be difficult to predict and that may involve
known and unknown risks and uncertainties and other factors which
may cause actual results, levels of activity and achievements to
differ materially from those expressed or implied by these FLI,
including, but not limited to, the following: changes in business
strategies and strategic opportunities; estimated future dividends;
financial strength and flexibility; debt and equity market
conditions, including the ability to access capital markets on
favourable terms or at all; cost of debt and equity capital;
potential changes in the CP share price; the ability of management
of CP, its subsidiaries and affiliates to execute key priorities;
general North American and global social, economic, political,
credit and business conditions; risks associated with agricultural
production such as weather conditions and insect populations;
the availability and price of energy commodities; the effects
of competition and pricing pressures, including competition from
other rail carriers, trucking companies and maritime shippers in
Canada and the U.S.; North
American and global economic growth; industry capacity; shifts in
market demand; changes in commodity prices and commodity demand;
uncertainty surrounding timing and volumes of commodities being
shipped via CP; inflation; geopolitical instability; changes in
laws, regulations and government policies, including regulation of
rates; changes in taxes and tax rates; potential increases in
maintenance and operating costs; changes in fuel prices; disruption
in fuel supplies; uncertainties of investigations, proceedings or
other types of claims and litigation; compliance with environmental
regulations; labour disputes; changes in labour costs and labour
difficulties; risks and liabilities arising from derailments;
transportation of dangerous goods; timing of completion of capital
and maintenance projects; sufficiency of CP's budgeted capital
expenditures in carrying out CP's business plan; services and
infrastructure; the satisfaction by third parties of their
obligations to CP; currency and interest rate fluctuations;
exchange rates; effects of changes in market conditions and
discount rates on the financial position of pension plans and
investments; trade restrictions or other changes to international
trade arrangements; the effects of current and future multinational
trade agreements on the level of trade among Canada and the U.S.; climate change and the
market and regulatory responses to climate change; anticipated
in-service dates; success of hedging activities; operational
performance and reliability; regulatory and legislative decisions
and actions; public opinion; various events that could disrupt
operations, including severe weather, such as droughts, floods,
avalanches and earthquakes, and cybersecurity attacks, as well as
security threats and governmental response to them, and
technological changes; acts of terrorism, war or other acts of
violence or crime or risk of such activities; insurance coverage
limitations; and the pandemic created by the outbreak of COVID-19
and resulting effects on CP's business, operating results, cash
flows and/or financial condition, as well as resulting effects on
economic conditions, the demand environment for logistics
requirements and energy prices, restrictions imposed by public
health authorities or governments, fiscal and monetary policy
responses by governments and financial institutions, and
disruptions to global supply chains.
We caution that the foregoing list of factors is not exhaustive
and is made as of the date hereof. Additional information about
these and other assumptions, risks and uncertainties can be
found in reports and filings by CP with Canadian and U.S.
securities regulators. Reference should be made to "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Forward-Looking Statements" in CP's
annual and interim reports on Form 10-K and 10-Q. Due to the
interdependencies and correlation of these factors, as well as
other factors, the impact of any one assumption, risk or
uncertainty on FLI cannot be determined with certainty.
Except to the extent required by law, we assume no obligation to
publicly update or revise any FLI, whether as a result of new
information, future events or otherwise. All FLI in this news
release is expressly qualified in its entirety by these cautionary
statements.
ABOUT CANADIAN PACIFIC
Canadian Pacific (TSX: CP) (NYSE: CP) is a transcontinental
railway in Canada and the United States with direct links to major
ports on the west and east coasts. CP provides North American
customers a competitive rail service with access to key markets in
every corner of the globe. CP is growing with its customers,
offering a suite of freight transportation services, logistics
solutions and supply chain expertise. Visit www.cpr.ca to see the
rail advantages of CP. CP-IR
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SOURCE Canadian Pacific