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I haven't seen CNR or CP plan anything for the future or electrification

Meanwhile other companies are developing electrified autonomous transport and more efficient tunneling

The derail stats of Canadian freight trains is appalling. The infrastructure is severely neglected
 

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Just like there was a shift to diesel-electric from steam, there will be a shift to fully electrified locomotives. It will start on high volume, high capacity corridors and migrate from there. Climate change initiatives and carbon taxes will see to it. The entire network will never be fully electrified because economics will never exist to justify it but a large portion of it will be in more densely populated areas, like in Europe and Asia.
 

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Just like there was a shift to diesel-electric from steam, there will be a shift to fully electrified locomotives. It will start on high volume, high capacity corridors and migrate from there. Climate change initiatives and carbon taxes will see to it. The entire network will never be fully electrified because economics will never exist to justify it but a large portion of it will be in more densely populated areas, like in Europe and Asia.
CNR.TO I would like some opinions on buying CN at this level,looks quite attractive to me.
 

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Depends on your view of the Kansas bid. CN has been beaten down because investors feel the bid is overreach. If it is the successful bid after this weekend, then CN stock price may go nowhere for at least a year while US regulators decide whether what they plan to do with the CN bid. It could actually drift down even further.
 

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I understand that CNR will also fund the US$700 million break fee owed to CP Rail. That's getting close to a billion Canadian dollars. A lot of money.

CNR also has to pay US$1 billion to KCS if its voting trust isn't approved by the U.S. regulator.

So before anyone actually merges there's a couple billion in play. How can that be good for business.

I own both CP and CNR, so I guess the break fee will be a wash for me, but I don't like this situation too much.

ltr
 

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I understand that CNR will also fund the US$700 million break fee owed to CP Rail. That's getting close to a billion Canadian dollars. A lot of money.

CNR also has to pay US$1 billion to KCS if its voting trust isn't approved by the U.S. regulator.

So before anyone actually merges there's a couple billion in play. How can that be good for business.

I own both CP and CNR, so I guess the break fee will be a wash for me, but I don't like this situation too much.

ltr
Thanks for the input,I bought some in mid 26$ and have bid at lower price. Time will tell,must have patience.
 

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Interestingly, there are 3 ways CN loses money on the bid:

-$700M US immediately to CP rail
-$1B US if the voting trust is not approved
-If the trust is approved but the deal is not, the loss to sell KCS, i.e. likely minimum $4.6B US, the delta between the CP and CN bid, if CN is forced to sell KCS to CP, should they decide to re-engage.

All told, CN could be out up to $7B Canadian versus a book value of $20B. CN has about $3.5B of net profit a year, of which half goes to the dividend. So if the takeover is not approved, it could take 4-5 years just to recover book value.

And if they win, it could still take them 20 years to pay off the debt, which will be $20B just for the deal as compared to $13B total debt prior. Even optimistically, it will consume the majority of their free cash flow for a decade. Dividend growth will be lower and potentially frozen or cut if a major recession hit.

You can perhaps see why the market is discounting the stock because in any scenario, it is pushing out future free cash flow generation far into the future and discounting it back. CNR was never a cheap stock to begin with either. If you like CNR and the deal, you will have plenty of opportunity to get in likely for years.
 

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I don't have any. AR, JB4 I believe you do, Doctrine or others anyone selling or sold b/c of the deal.

Doctrine before deal closes/is approved do you have a entry price in mind at which it would be worth the risks and a value if it all gets approved.
 

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I have a full position and am really annoyed at CN but I will continue to hold, at least for foreseeable future. The STB may deny the trust within the month anyway and the deal is off at great expense.
 

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I don't have any. AR, JB4 I believe you do, Doctrine or others anyone selling or sold b/c of the deal.

Doctrine before deal closes/is approved do you have a entry price in mind at which it would be worth the risks and a value if it all gets approved.
I have been out of CNR since 2019. I would be on the sidelines as I don't see a rush and if it does close, I would like to see a few full quarters of results with the combined entity to see if they can actually maintain earnings per share.

If the price started going below $100 then maybe that would be enough to entice me back in. I note it has traded below $100 for at least a bit in every year for the last 5 so I don't see that as a stretch, even if it is a ways to go from here.
 

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I noticed a CNR train yesterday going through our city and one of the cars had a old faded KCS sign on it. Never noticed that before, but would be easy to miss.
 

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As a CNR shareholder, I am relieved. These railways are obsessed with bigger is better to the detriment of their shareholders. Enough already!
 

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. Oh well..."poof", dream gone replaced with a pot full of money....I'll keep my shares but don't intend to buy any more.
 

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Interestingly, there are 3 ways CN loses money on the bid:

-$700M US immediately to CP rail
-$1B US if the voting trust is not approved
-If the trust is approved but the deal is not, the loss to sell KCS, i.e. likely minimum $4.6B US, the delta between the CP and CN bid, if CN is forced to sell KCS to CP, should they decide to re-engage.
Is it a done deal now that CN will not buy KCS?
And this will cost CNR $1B?
 

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Not necessarily over but it should be over. Yes, I believe the payments are due.

WaPo has a decent article on this today.
 

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I really don't understand how a $1B loss results in a $20 upward movement in the share price. I bought in around $132 and thought the KCS offer was overpriced but the acquisition would provide an amazing moat with its Can-Mexico line. Happy to hold and curious to see how the story continues.
 

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It is that the acquisition was an over-priced ego trip. The share price is up on the premise the deal is off.

It was a hare brained attempt anyway. There was no way the USA was going to allow one entity to control both lines to Mexico.
 

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Thanks @AltaRed. I was of the mindset that the deal would be blocked by STB and that CNR had some large penalties to pay if they deal fell through. This did result in a lower price and entry opportunity for me. I just didn't expect such a jump (was around $147-8 in April) to its current price of $159. I also was suffering from a bit of FOMO when I made the purchase as I had always wanted to but CNR or CP and always thought it was over priced. In reality, you need to pay a premium for quality. Additional FOMO would have been if the deal had been approved. Even though CNR would have overpaid, the route would have created an amazing moat.
 
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