The U.S. Surface Transportation Board has rejected the use of a voting trust agreement in connection with Canadian National Railway Co.’s proposed takeover of Kansas City Southern Railway.
The board said the proposed voting trust is not consistent with the public interest standard under its merger regulations.
Earlier this month, Kansas City Southern said it would delay a shareholder vote on its deal to be bought by CN Rail that is set for Aug. 19 if a U.S. regulator didn’t share its decision on a key voting trust by Aug. 17.
The trust would’ve allowed KCS to remain independent while a full review of the transaction is conducted, but shareholders would get paid without having to wait for a final decision on the deal.
The U.S. Surface Transportation Board said it would make a decision on whether to allow CN to use the trust by the end of August.
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