Canadian Pacific raised its offer to acquire Kansas City Southern by close to $2 billion, raising a bidding war with Canadian National, according to a report by Reuters on Tuesday.

  • The offer signals a U-turn from the second-biggest Canadian railroad operator’s position in April to maintain its bid, but it is lower than a $29.56 billion takeover proposal.
  • The purchase of the U.S. railroad operator by either of its Canadian peers would establish the first direct railway linking Canada, the United States, and Mexico.
  • Shares of Kansas City are 6.6% up in premarket trading at $287. A shareholder vote is scheduled on August 19 to gain approval for its deal with Canadian National.

Canadian Pacific’s improved offer comprises $90 in cash and 2.884 of its shares for every stock of Kansas representing, representing a per-share value of $300. Canadian National has offered $325 per Kansas City share, a higher bid that won support from the U.S.-based company. CP down -1.61%, KSU up +7.48%, CNI down 0.31%