What happened
Shares of railroad Kansas City Southern (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.
So what
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 (BX) is teaming up with Global Infrastructure Partners to offer $220 per share to acquire all of Kansas City Southern.
Image source: Getty Images.
Now what
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.
