Canadian Pacific Railway Ltd. is preparing to make a new, higher bid for Kansas City Southern, in an effort to usurp the U.S. railroad’s pending deal with rival Canadian National Railway Co., the Wall Street Journal reported.

The board of Canadian Pacific met to authorize an offer of about US$300 a share, or about US$27 billion, the newspaper reported, citing people familiar with matter. It’s possible the railroad won’t follow through and actually make the bid, the Journal said.

The latest development adds another twist in the two-way race to see which Canadian railroad will win Kansas City Southern and, in doing so, unite rail networks that stretch southward through the heart of the U.S. and deep into industrial Mexico. If successful, Canadian Pacific would get a bit of retribution after Canadian National intervened with a US$30 billion offer to top CP’s US$25 billion bid that set it all in motion back in March.

Canadian Pacific has long held that its plan would provide Kansas City Southern a clearer shot at winning regulatory approval from the U.S. Surface Transportation Board, without requiring big divestitures.

The U.S. railway agreed to the Canadian National deal in May. There’s a planned shareholder vote on that combination on Aug. 19, and that may motivate Canadian Pacific to follow through with its higher bid, the Journal reported.

Canadian Pacific declined to comment on the report. Kansas City Southern rose 6.5 per cent to US$287 in after-hours trading Monday.