CN Rail says Bill Gates and the Caisse support its bid for Kansas City Southern

MONTREAL _ Canadian National Railway Co. says Bill Gates and the Caisse de depot et placement du Quebec are supporting the company’s US$33.6-billion bid to acquire Kansas City Southern.

Chief executive JJ Ruest told an investor conference today that most of its shareholders are excited about the combination despite concerns raised by its fifth-largest shareholder, Britain’s TCI Fund Management.

He pointed to public support from Cascade Investment LLC, controlled by Bill Gates, and the Quebec pension fund manager.

Kim Thomassin, the head of investments for the Caisse, said in a letter that it believes the deal has the potential to “not only create jobs in a company based in Montreal, but also to open new markets to Quebec export companies and stimulate the economic recovery as a whole.”

The Caisse is CN Rail’s ninth-largest investor with a 1.7 per cent stake in the Montreal-based railway, according to financial data firm Refinitiv.

Cascade Investment is the largest with a 14.3 per cent stake. TCI Fund holds a 2.9 per cent interest.

“This acquisition is in line with CDPQ’s objectives to support both Quebec companies in their international growth and the transition toward a low-carbon economy,” Thomassin wrote.

On Tuesday, TCI, who is also CP Rail’s largest shareholder, urged CN’s board to drop its bid for KCS because of the sizable break fee CN Rail would be forced to pay if its voting trust is not approved by the U.S. railway regulator.

This report by The Canadian Press was first published May 19, 2021.