KSU - Kansas City Southern-Canadian Pacific deal viewed favorably by analysts

Kansas City Southern (KSU) jumps in early trading after attracting a $25B buyout offer from Canadian Pacific (CP).A deal for KSU has been speculated upon for quite a long time. Diving into the mega-rails deals, JPMorgan says it is unlikely that any new bidders will step up with a higher offer, especially with CP able to generate more operating synergies from a KSU acquisition than peers. "We remain constructive on CP and the long term potential synergies of the deal, which are muted in the near term by the purchase price paid and the regulatory uncertainty." Meanwhile, Loop Capital Markets upgrades Canadian Pacific to Buy from Hold following the deal and increases its price target to C$553 from C$469. Looking at the regulatory landscape, Credit Suisse doesn't think the KSU-CP combination will set off any major alarms concerning significant competitive harm to shippers or other railroads. KSU +17.28% premarket. CP -3.33%. Read

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Kansas City Southern-Canadian Pacific deal viewed favorably by analysts