Governance in Brief – April 29, 2021

Posted on April 29, 2021

April 29, 2021 | Editor: Martin Wennerström

 

Canadian carriers battle it out for Kansas City Southern

Canadian National Railway (“CN”) has made an unsolicited bid to acquire U.S. rail carrier Kansas City Southern (“KCS”), sparking a bidding war with its largest domestic competitor Canadian Pacific Railway (“CP”). In March, CP had made a combined stock and cash offer for KCS, implying an enterprise value of USD 29 billion and giving current KCS shareholders 25% of the combined company. U.S. regulators had already exempted the deal from certain stricter aspects of their review process, citing a lack of network overlap between the two carriers and the relatively small size of the combined entity. In contrast, CN’s stock-and-cash offer implies an enterprise value of USD 33.7 billion and gives current KCS shareholders 12% of the combined company. While KCS’ board has entered into talks with CN, such a deal is more likely to fall under the stricter regulatory standards from which the CP-KCS deal was exempted. CP has officially denied that it will raise its bid to match CN, while criticizing CN’s use of debt to finance its offer. Whichever bidder wins out, the resulting merger would create the first rail network connecting the U.S., Canada, and Mexico.

BNN Bloomberg | CP | CN | Transport Topics | CTV | Reuters | Freight Waves

 

Toshiba’s CEO resigns amid buyout talks

Toshiba Chairman Satoshi Tsunakawa has replaced Nobuaki Kurumatani as the company’s CEO. The change occurred against the backdrop of a potential USD 20 billion buyout offer from Kurumatani’s former employer, CVC Capital Partners. Toshiba’s board had previously described the proposal as insufficiently detailed and “completely unsolicited,” while noting that it would require a “substantial amount of time…for consideration.” Following the departure, CVC signaled that it would indefinitely postpone the submission of a formal offer, reportedly to give the “new leadership…time to settle in.”

Toshiba (1) | Toshiba (2) | Toshiba (3) | Nikkei | Reuters (1) | Reuters (2)


Veolia and Suez agree on merger terms

On April 11, Veolia and Suez announced a merger deal, with Veolia agreeing to a payment of EUR 12.8 billion (EUR 20.50 per share) for the remaining 70% of Suez that it does not already own. The agreement, which ends months of taut negotiations between the two rivals, is expected to create a “global champion” in waste and water services with annual revenues of up to EUR 37 billion. Furthermore, the deal includes job guarantees for a period of four years and allows for the spin-off of a new Suez company mainly consisting of Suez’ French water business. The two companies are expected to enter into a definitive agreement by May 14.

Reuters | Suez | Veolia | Bloomberg |

 

Danske CEO quits due to money laundering investigation

Danske Bank CEO Chris Vogelzang has announced his departure from the bank after less than two years, due to having been named as a suspect in a money laundering investigation at his former employer ABN AMRO. Danske has itself been involved in a major money laundering scandal, revealed in 2017 and relating to EUR 200 billion in transactions passing through its Estonian branch between 2007 and 2015. The bank is still under investigation by US, Danish, French and Estonian authorities. Vogelzang’s mandate had been to restore trust in the bank and limit the scandal’s impact. Chief Risk Officer Carsten Egeriis will become CEO, officially on a permanent basis.

Danske Bank | Reuters | Finans.dk