Kinder Morgan managers increase buyout offer

Kinder Morgan Inc. (KMI) senior managers and investors have offered $22 billion total to buy the pipeline company and take it private, saying they will pay $107.50/share compared with an earlier offer of $100/share.

Aug. 28, 2006

2 min read

By OGJ editors
HOUSTON, Aug. 28 -- Kinder Morgan Inc. (KMI) senior managers and investors have offered $22 billion total to buy the pipeline company and take it private, saying they will pay $107.50/share compared with an earlier offer of $100/share.

KMI and affiliates own 40,000 miles of gas and oil pipelines and 150 terminals in the US and Canada. Chairman and Chief Executive Officer Richard Kinder said May 29 that he and other senior managers have the backing of an investor group including Goldman Sachs Capital Partners and its affiliates, American International Group Inc., the Carlyle Group, and Riverstone Holdings LLC (OGJ, June 12, 2006, p. 34).

The latest offer involves $15 billion for the stock purchase, plus the assumption of $7 billion in debt. KMI's board approved the agreement and will recommend that stockholders do the same, the company said in an Aug. 28 statement.

Subject to stockholder and regulatory approvals, the transaction is expected to close by early 2007. Kinder plans to reinvest all of his 24 million shares into the private company, and he would continue as chairman and chief executive officer of the private firm.

The proposed transaction is in the form of a merger of the company with a new acquisition vehicle to be formed.