Canadian National Railway Co CNI

Breakup fee

[Justhalffull]

Not often mentioned is that CN will have to pay CP the $700 million breakup fee if they do not accept the CP offer.

[JayBanks]

  In my understand technically KCS already has or will pay that fee to CP. CN is gonna pay the fee back to to KCS which will go on their balance sheet, which CN is purchasing, so in the shell game we are basically even. CN isn't paying CP anything, they are just giving goodwill back to KCS in exchange for killing CPs deal and moving forward with CN. I understand your angle, but it is

[Justhalffull]

It has not been paid yet, as the decision on who wins the fight is not over.  However, it is not an even deal.  While the Kcs balance sheet may be even, Cn,s balance sheet is out $700,000,000, no matter who they pay it too.  And while it may be just 2% of the total deal value, it is almost 1.00 per Cn share that is gone.  

[JayBanks]

I'm just reading anouther source than one I was on, it does say CN is paying CP, so your correct on that. I'm pretty sure KCS has already broke the deal with CP due to the deals terminaton in naming CN superior. In my understanding CP has to make anouther offer to get back in the game by the end of the week. If correct, if the US regulators reject CNs terms of deal, CN has to adjust it