Forget bitcoin. Railroads are the new bubble.

In this year of financial kookiness around SPACs, bitcoin and nonfungible tokens, the hottest M&A target is an old-school U.S. railroad that traces its roots to the 1800s. And it’s now at the center of a bidding war.

Kansas City Southern rebuffed multiple offers from private equity firms last year before agreeing in March to sell itself to Canadian Pacific Ltd. On Dec. 14, rival Canadian National Railway Co. lobbed in an offer of its own. Its $325-a-share stock and cash bid for Kansas City Southern values the railroad at $33.7 billion including the assumption of debt. The proposal is a roughly 20% premium to the implied $275-a-share value of Canadian Pacific’s bid upon its announcement and more than 50% higher than what Blackstone Group Inc. and Global Infrastructure Partners reportedly offered for Kansas City Southern only in September.

Why the frenzy? As the only major carrier with a significant presence deep into Mexico, Kansas City Southern stands to be a prime beneficiary of any North American manufacturing renaissance that results from the supply-chain snarls of the pandemic and elevated trade tensions with China. Canadian Pacific and Canadian National are both eyeing the prospect of a seamless north-south railroad that can compete more effectively with trucks. But in the end, it may come down to this: Absent an overhaul of antitrust rules, Kansas City Southern is the last remaining viable takeover target among large North American railroads. Now that it’s in play, those with the financial and strategic ammunition to make a deal work aren’t about to let the opportunity pass them by.

After a flurry of consolidation among North American carriers in the 1980s and 1990s, regulators adopted tougher rules in 2001 that require merging railroads to prove a transaction is in the public interest and actually enhances competition. The standard is tricky and untested and has thus effectively acted as a brake on dealmaking in the intervening decades. But Kansas City Southern was granted an exemption from the tougher rules because of its relatively smaller size. Analysts speculated that this would make the railroad an immediate takeover target for the deal-hungry industry. It took two decades, but with Kansas City Southern’s board making clear that it’s now interested in selling, Canadian National wasn’t about to sit on its hands.

“The company is now available,” Canadian National CEO Jean-Jacques Ruest said, when asked by analysts recently why he was making a move now. “We want to partner. It’s not very often that a Class 1 railroad or large property becomes available. We’ve always had a vision of combining the two companies and what it could do for North America, and especially at this time.”

Some key shipping groups and the Department of Justice have called for the tougher merger standards to be applied to a Kansas City Southern transaction, given the growth of the company since 2001 and the potential ramifications of a deal. Interestingly, earlier this month, when Canadian Pacific was still the one doing the acquiring, Canadian National wrote a letter to the Surface Transportation Board (the rail industry’s primary regulator) arguing that a Kansas City Southern deal shouldn’t get an exemption. “Any justification for the potential KCS exception has evaporated,” Canadian National executives said in the letter.

In particular, Kansas City Southern’s 2005 acquisition of Mexico’s TFM line significantly expanded its network and revenue and gave it the south-of-the-border assets that buyers are so interested. It’s “a very different railroad from the one it was,” Canadian National said.

Canadian National executives took a more neutral view of the 2001 rules exemption when discussing their bid, but said the proposed transaction could pass muster either way. The railroad echoed arguments made by Canadian Pacific about how a streamlined U.S.-Mexico-Canada network would provide new service options for shippers and wrest freight traffic away from the trucking industry, which emits significantly more carbon emissions. But unlike Canadian Pacific, which has no real overlap with Kansas City Southern, Canadian National already has a presence on the U.S. Gulf Coast, duplicating Kansas City Southern’s lines in Louisiana.

Executives downplayed this as a potential issue, saying that there were less than 70 miles of overlap between the two companies (only about 1% of their combined network) and that they were prepared to mitigate any competitive effects to the extent required by the STB.

You can expect the complications posed by that limited overlap to be a key Canadian Pacific talking point. But given the expected long, drawn-out regulatory process in either case and the fact that no one really knows at this point what the STB will or won’t allow, that wrinkle may not matter all that much to Kansas City Southern shareholders when stacked up against the higher bid. Canadian National is also offering more cash: $200 a share compared with Canadian Pacific’s $90. Because the stock component of Canadian National’s bid is lower, it also doesn’t need approval from its own shareholders to proceed.

Canadian National said it was “confident that our shareholders and stakeholders will be highly supportive of this transaction,” but the drop of as much as 8% in its share price on the news of this expensive bid shows why it’s helpful to not have to ask their permission.

The question now is how Canadian Pacific responds. The bidding has already entered bubble territory. After all, Kansas City was trading at a record before Canadian Pacific even made its offer in March. Both companies are relying on notoriously squishy revenue benefits to justify the valuations of their current proposals. Stretching much further will require some serious mathematical gymnastics. But when a once-in-a-lifetime deal opportunity comes along, emotion and egos tend to be bigger drivers of decision-making than math.

Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies.