The use of a voting trust arrangement in connection with Canadian National Railway Co.’s proposed takeover of Kansas City Southern Railway has been rejected by the US Surface Transportation Board.
The proposed voting trust, according to the board, does not meet the public interest criteria set forth in its merger standards.
Kansas City Southern announced earlier this month that a shareholder vote on its proposal to be bought by CN Rail, scheduled for August 19, would be postponed if a US regulator did not publish its verdict on a critical voting trust by August 17.
The trust would’ve allowed KCS to remain independent while a full review of the transaction is conducted, but shareholders would get paid without having to wait for a final decision on the deal.
The U.S. Surface Transportation Board said it would make a decision on whether to allow CN to use the trust by the end of August.
Source_ The Canadian Press