Canadian Pacific Railway (CP.TO) has re-entered the battle to take over Kansas City Southern (KSU), submitting a new stock-and-cash bid valued at $31 billion.
The new proposal announced Tuesday is still less than the offer made by rival Canadian National (CNR.TO), but CP says its bid “offers significantly higher regulatory certainty than the proposed CN merger and significantly higher value than our previously agreed combination.”
“We’ve had a lot of opportunities to engage with KCS shareholders. We’ve heard it loud and clear that shareholders want certainty that’s critically important,” CP chief executive Keith Creel said on a conference call with analysts on Tuesday.
“That’s what this deal offers: value certainty and deal certainty.”
The new bid comes nine days before KCS shareholders vote on CN’s rival offer.
CN and CP had been locked in a battle over which railway would take over KCS. At stake is the creation of the first railway in North America that would connect Canada, the U.S. and Mexico, as well as capitalize on the USMCA trade deal.
In May, KCS terminated its merger agreement with CP, accepting a takeover offer from CN valued at $33.6 billion. Creel wrote in a letter to the KCS board of directors that the company opted not to engage in a bidding war with CN in May as it would have been “destructive to CP shareholders.”
“However, we believe that now is the right time for us to re-engage with KCS, as the regulatory uncertainty of the proposed CN merger has placed KCS stockholders in the unfortunate position of having to vote on the proposed CN merger and, as a consequence of approving such proposal, eliminate KCS’s ability to consider superior offers, all the while not having any level of certainty with respect to whether the STB will approve CN’s use of a voting trust,” he wrote.
Creel also wrote that CP has a clear path to gaining approval for its voting trust from the U.S. Surface Transportation Board (STB) and that the deal with CP will be evaluated under pre-2001 merger rules that are less stringent than the rules the CN deal would be evaluated under.
CN is awaiting a decision by the STB on its plan to set up a voting trust that would acquire KCS and hold the company during the regulator’s review of the overall deal. The STB has already approved CP Rail’s use of a voting trust.
“KCS stockholders should not assume that there is any certainty of value in the proposed CN merger given the level of uncertainty as to whether the STB voting trust approval or final approval of the combination will be obtained by CN, especially in view of President Biden’s recent executive order on ‘Promoting Competition in the American Economy’,” Creel wrote. Biden’s order is aimed at increasing competition in various sectors, including the rail industry, and CP has argued that the CN-KCS deal would create competition issues and reduce options for rail customers.
In a statement on Tuesday, CN says its offer “remains superior and the best option for both companies’ stakeholders to deliver on a combination that will enhance competition and provide new servicing options for customers.”
With files from the Canadian Press
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
