Canadian Railroads > Warren Buffett gives advice to CP&CN executives re: KCS merger

At the Berkshire Hathaway annual meeting, the owners of the BNSF,
Warren Buffett was asked about the Canadian railroads bidding on KCS.

He said the proposed mergers would affect the BNSF to a "small degree".
He said, "There’s no magic to the Kansas City Southern"
He suggested both railroads are offering too much, "We would not pay this price."
He said that in the past, "We looked at buying CP"

He concluded with advice for CP and CN executives,
"It’s somebody else’s money, and you’re going to retire in five or 10 years.
People are not going to remember what you paid,
but they’re going to remember whether you built a larger system.
The investment bankers are cheering you on at every move.
They’re just saying, “You could pay more.”
They’re moving the figures around.
The spreadsheets are out, and the fees are flowing."
 

Yesterday SOO6617 posted a similar thread Warren Buffett on the Battle for KCS on the Western Board:
https://www.trainorders.com/discussion/read.php?1,5248035

My reply included the following applicable comments:

Actually Warren Buffet's view that KCS is overpriced does not surprise me. If he thought he could buy KCS at a price right for him, Berkshire Hathaway would have made a bid well before the CP proposal.

The value of KCS, however, is not exactly absolute. Its worth to Warren Buffet, CP, and CN may differ in each instance. That is because future value of KCS depends somewhat on how it can be incorporated into and utilized in each of the three rail systems, CP, CN, and BNSF..

The financial performance numbers for BNSF speak for themselves.

Over the past five years, Berksire Hathaway's stock performance has pretty much matched the DJIA, it has been an average performer.

ALLEN