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Canadian Pacific Railway Ltd. plans to make a new increased bid for Kansas City Southern, according to people familiar with the matter, reigniting a buyout battle with Canadian National Railway Co. for the US railroad.
The board of directors of Canadian Pacific met on Monday to approve an offer that values Kansas City Southern at nearly $ 300 per share, the sources say, or about $ 27 billion. There is no guarantee that Canadian Pacific will follow the plan; if so, it is expected to do so soon.
Canadian Pacific had entered into a cash and stock deal with Kansas City Southern valued at about $ 275 per share, or $ 25 billion. Kansas City Southern then agreed to a sale to Canadian National instead after CN offered around $ 30 billion (then worth about $ 320 per share) and Canadian Pacific refused to increase its offer.
Kansas City Southern shares traded at around $ 269.60 apiece on Monday.
Canadian Pacific may be motivated to submit a new offer ahead of the scheduled shareholder vote on the Canadian National-Kansas City Southern deal slated for Aug. 19.
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