April 20, 2021, 7:24 a.m. EDT

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

Shares of Kansas City Southern (NYS:KSU) soared 19% toward a record in premarket trading Tuesday, after Canadian National Railway Co. (NYS:CNI) (TSE:CA:CNR) 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 (NYS:CP) (TSE:CA:CP) 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 (DJX:DJT) has advanced 18.3% and the Dow Jones Industrial Average (DOW:DJIA) has gained 11.3%.

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