Shares of railroad Kansas City Southern (NYSE:KSU) went tearing down the track this morning, rising more than 10% in early trading and still up a respectable 4.8% as of 12:55 p.m. EDT.
According to financial news site TheFly.com, Spanish language news site El Negocio confirmed rumors previously floated by The Wall Street Journal that private equity powerhouse Blackstone Group (NYSE:BX) is teaming up with Global Infrastructure Partners to offer $220 per share to acquire all of Kansas City Southern.
Kansas City Southern hasn't made any statements that would confirm a buyout is in the offing.
Still, the new reportage appears to support what WSJ previously reported -- that Blackstone and its partner are prepared to pay more than $21 billion to acquire a railroad expected to benefit from any future growth in U.S.-Mexico cross-border trade. And given that KSU's market cap is currently only about $17 billion, that would be a significant premium the company's would-be acquirers would be paying.
Assuming KSU management is receptive to a buyout, and at the stated price, railroad investors could be in for a windfall profit in relatively short order.