Topic: How To Invest

The Successful Investor Hotline – Friday, April 23, 2021

Article Excerpt

CANADIAN NATIONAL RAILWAY CO., $135.85, Toronto symbol CNR, remains a buy. CN operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country. It also travels down through the U.S. Midwest, connecting Canada to the Gulf of Mexico. This week, the company offered to acquire U.S.-based railway Kansas City Southern (New York symbol KSU). Its rail network of roughly 11,400 kilometres extends from the U.S. Midwest and Southeast into Mexico. CN will pay $200.00 U.S. in cash plus 1.059 of a CN common share for each KCS share. Based on current prices, that works out to $315.28 U.S. This new offer tops an earlier bid from CP Rail (see below) that KCS has already accepted. However, there is more overlap between CN and KCS which will probably make it harder to win U.S. regulatory approval for this deal. That’s why KCS shares are trading at $301.61 U.S., or 4.3% below the value of CN’s offer. In all, CN expects this purchase would cost $33.7 billion…