By Dave Sebastian

 

Canadian National Railway Co. said it has received Kansas City Southern's deal termination notice.

Kansas City Southern said a recent takeover from Canadian Pacific Railway Ltd. is superior to the one it had accepted from Canadian National. Canadian National said Wednesday that Kansas City Southern would pay it a $700 million termination fee as well as $700 million in the refund for Canadian Pacific's termination fee.

Canadian National said it isn't obligated to pay any termination fees.

"While we are disappointed that we will not be able to deliver the many compelling benefits of this transaction to our stakeholders, the decision to bid for KCS was a bold and strategic move that still resulted in positive outcomes for CN," Canadian National Chief Executive JJ Ruest said. "We believe that the decision not to pursue our proposed merger with KCS any further is the right decision for CN as responsible fiduciaries of our shareholders' interests."

Canadian National's bid suffered a major setback Aug. 31, when the Surface Transportation Board, a five-member panel that must bless mergers of freight railroads, ruled that the company wouldn't be permitted to complete a deal using a temporary voting trust that was a crucial to part of the offer. The STB ruled that Canadian National hadn't demonstrated that its use of a voting trust would be consistent with the public interest.

 

Write to Dave Sebastian at dave.sebastian@wsj.com

 

(END) Dow Jones Newswires

September 15, 2021 09:10 ET (13:10 GMT)

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