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8/4/2020
A consortium of private equity investors is considering a possible takeover bid for Kansas City Southern, the Wall Street Journal reported July 28.
The newspaper reported that the Blackstone Group Inc. and Global Infrastructure Partners are exploring a potential buyout that could be worth more than $21 billion.
The firms together are exploring a potential deal and speaking to banks, including Citigroup Inc., about financing, people familiar with the matter told the newspaper.
The deal provides a bet on the increase in U.S.-Mexico trade, given that KCS' rail network operates in both countries, the paper reported.
KCS was the subject of merger or acquisition rumors a month ago, Seeking Alpha reported.
KCS President and Chief Executive Officer Patrick Ottensmeyer addressed the earlier media reports in response to a question during a July 17 conference call with analysts following the company's second-quarter financial report. Those media reports appeared to becoming out of Europe or London, Ottensmeyer said.
"Obviously, you know, the standard answer is no comment on things like that," Ottensmeyer said, according to a transcript of the call. "But the story behind that is that we've got a terrific plan, we've got outstanding opportunities, we have a lot of runway to have a successful run as a independent, standalone publicly traded company and that's our focus and that's what we're going to do."