Private-Equity Firms Discuss Bid for Kansas City Southern
July 31 2020 - 3:48PM
Dow Jones News
By Cara Lombardo and Miriam Gottfried
A group of big buyout investors is considering a takeover bid
for railroad operator Kansas City Southern that could be worth more
than $21 billion and mark a big bet on U.S.-Mexico trade.
Blackstone Group Inc.'s infrastructure arm and Global
Infrastructure Partners are together exploring a potential deal and
speaking to banks including Citigroup Inc. about financing,
according to people familiar with the matter.
There is no guarantee they will proceed with a formal offer or
that Kansas City Southern would be receptive. Assembling the
roughly $15 billion equity check that could be required for a deal
of that size would pose significant hurdles for Blackstone and GIP,
which are investing out of $14 billion and $22 billion
infrastructure funds, respectively.
If there is a deal, it would be significant. Kansas City
Southern had a market value of roughly $14 billion Friday afternoon
and including debt, the value of a bid could exceed $21 billion,
some of the people said.
The bid being discussed would likely include about $6.5 billion
worth of debt financing, these people said.
(END) Dow Jones Newswires
July 31, 2020 15:33 ET (19:33 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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