TERSE distain was how Canadian Pacific Railway (CP)
greeted Canadian National Railway's (CN) surprise and unsolicited
US$65 billion bid for the Kansas City Southern (KCS) Railway that
topped CP's earlier offer of $60 billion.
"CN's proposal is illusory and inferior to the
proposed CP/KCS transaction, and that a CN/KCS transaction would be contrary to
the public interest given its adverse impacts on competition," said CP
lawyer David Meyer, in a letter addressing the regulatory US
Surface Transportation Board.
"Canadian Pacific respectfully suggests that the board
should see things the same way: the only combination involving KCS that is in
the public interest is the one that Canadian Pacific has proposed, and which
has already garnered support from over 400 shippers and other
stakeholders," said Mr Meyer.
"A CN/KCS combination would reduce competitive options
for countless shippers. A CN/KCS combination would extinguish competition.
Mr Meyer pointed out that CN and KCS serve many shippers in
common; they operate parallel lines between Baton Rouge and New Orleans; they
both serve grain and other shippers in eastern Nebraska and western Iowa; they
both reach the port of Mobile, Alabama; they both serve shippers in
Springfield, Illinois; East St Louis, Illinois; Jackson, Mississippi; and their
lines are largely parallel throughout eastern Mississippi.
"Even more fundamentally, between the Upper Midwest
and Gulf Coast - in corridors like Twin Cities to New Orleans - a CN/KCS
combination would reduce the number of independent routing options from four to
three," Mr Meyer said.
"Accordingly, Canadian Pacific urges the board to
promptly confirm that consideration of the uniquely straightforward and
beneficial CP/KCS transaction may proceed under the pre-2001 rules and that
Canadian Pacific's voting trust proposal requires no further board
approval," said Mr Meyer.
Source : HKSG / Photo : Transport Topics.
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