By Justin Franz 

KANSAS CITY — Kansas City Southern is staying the course with Canadian National. On Thursday, the KCS board determined that Canadian Pacific’s revised offer was not good enough for it to back out of its plans to merge with CN. 

Earlier this week, CP made a second attempt to merge with KCS by upping its previous offer. The new bid valued KCS at $300 per share, about $20 lower than CN’s offer, but one that CP officials said came with a silver lining: the belief that the CP-KCS merger has a better chance of being approved by the U.S. Surface Transportation Board.

CP and KCS had agreed to merge back in March but then a few weeks later CN got involved and offered more money for the Kansas City-based Class I. CP refused to increase its offer for KCS and eventually lost out on the bidding war.

KCS shareholders are scheduled to vote next week on whether or not to formally accept the CN offer. The board has recommended that they vote yes. However, there is still the lingering question of if the STB will allow CN to put KCS into trust while awaiting approval. By putting the railroad into trust, CN could pay shareholders earlier. However, if the STB were to reject the merger, CN would have to sell KCS, presumably at a lower rate. The STB has said it will make a decision on whether it will let CN use a blind trust this month. However, KCS has decided that if that decision is not made before August 17, that it will delay the August 19 vote.