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Kinder Morgan Shareholders Vote to Take the Money in Buyout

Kinder Morgan Inc. (KMI) stockholders on Tuesday overwhelmingly approved a management-led plan to take the company private in a transaction valued at $22 billion, including $7 billion in debt. The private equity buyout, considered one of the largest ever, will give most of the company's shareholders $107.50 in cash, without interest, for each KMI common share, a 27% premium over the $84.41 closing price on May 26, the last trading day before the proposal was made (see Daily GPI, May 31).

Founder Richard D. Kinder, chairman and CEO, is leading the buyout with co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and affiliates of Goldman Sachs Capital Partners, American International Group Inc., The Carlyle Group and Riverstone Holdings LLC.

Nearly 100 million shares of common stock were voted at the special meeting, representing about 75% of KMI's total outstanding shares. Of those shares voting, 97 million (97%) voted in favor of the merger agreement, representing 73% of KMI's total shares. Approval by more than two-thirds of KMI's total number of shares was required.

Once the merger is completed, all KMI stockholders, except for KMI subsidiaries Knight Holdco LLC and Knight Acquisition Co., will be bought out. The transaction is expected to close in 1Q2007.

KMI owns an interest in or operates 43,000 miles of pipelines that transport primarily natural gas, crude oil, petroleum products and carbon dioxide. It also owns more than 150 terminals that store, transfer and handle products such as gasoline and coal. Kinder Morgan's utility subsidiaries provide natural gas distribution service to more than 1.1 million customers.

KMI also owns the general partner interest of publicly held Kinder Morgan Energy Partners, and combined, the companies have an enterprise value of more than $35 billion.

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