Canadian Pacific Railway Ltd. is tapping the U.S. investment-grade bond market to help fund its acquisition of Kansas City Southern.

Canadian Pacific Railway reported mixed third-quarter earnings on Oct. 20, when the Calgary, Alberta-based carrier said combined freight and nonfreight revenue increased 4.3% year-over-year to C$1.94 billion from C$1.86 billion a year ago.

Just hours before the expiration of a Sept. 12 deadline, Kansas City Southern accepted a $31 billion merger proposal from Canadian Pacific Railway.

Canadian Pacific Railway has edged ahead of rival Canadian National in the back-and-forth battle to acquire Kansas City Southern, as a key vote from KCS shareholders and an earlier ruling from the Surface Transportation Board point toward resolution of a duel that has been brewing for the better part of six months.

NEW YORK — Kansas City Southern has abandoned its agreement to be acquired by Canadian Pacific, choosing instead a competing bid from Canadian National Railway with a bigger price tag, but also greater regulatory risks.

Canadian Pacific Railway Ltd. declined to increase its offer for Kansas City Southern and urged the U.S. railroad instead to reject Canadian National Railway Co.’s higher bid because of regulatory risks.

Canadian National Railway Co.’s proposal to acquire Kansas City Southern will be judged under stricter regulations adopted in 2001, the U.S. regulator said in an expected decision that lays the ground rules for what would be the first major rail merger in more than two decades.

Canadian Pacific Railway Ltd. said Canadian National Railway Co.’s unsolicited offer for Kansas City Southern shouldn’t be exempt from tougher merger rules that the U.S. railroad regulator established two decades ago.

Canadian Pacific Railway Ltd.’s chief executive officer tried to quash speculation that a bidding war is at hand for Kansas City Southern.

An epic battle is in the early stages with Class I railroad powerhouses Canadian National and Canadian Pacific competing with multibillion-dollar bids to purchase the smaller Kansas City Southern railroad.