With a ruling by Delaware Chancery Court Judge Travis Laster, the $44 billion mega-merger of Kinder Morgan’s internal roll-up is on track for a Nov. 20 shareholder vote.
Including the assumption of debt, combining the Kinder Morgan companies puts a $71 billion value on the deal.
Some shareholders are concerned about tax implications of the merger, among ofther factors.
The injunction was sought by some unitholders related to the merger transaction in which the corporation, or general partner, Kinder Morgan Inc. will acquire all of the publicly-held shares and units of Kinder Morgan Energy Partners, Kinder Morgan Management LLC and El Paso Pipeline Partners. The judge said in the ruling that, according to the language of the partnership agreement, the merger only requires the affirmative vote of a majority of the outstanding limited partner units “voting together as a single class.”
Some investors had filed a class action lawsuit against the pipeline giant, alleging the transaction would create unexpected—and significant—tax impacts. Although the judge’s order allows the Nov. 20 vote to take place, it doesn’t end the potential for litigation.
CEO Rich Kinder said management expects the deal to close by Thanksgiving.
“We believe merging the companies benefits our shareholders and unitholders, simplifies the Kinder Morgan story by transitioning to one security and paves the way for superior growth at KMI for years to come,” Kinder said in a statement. “KMI projects a dividend of $2.00 per share for 2015, a 16% increase over the budgeted 2014 KMI dividend target of $1.72 per share, and the company expects to grow the dividend by approximately 10% each year from 2015 through 2020 while producing excess coverage of over $2 billion.”
Legal wrangling
In other Kinder Morgan legal news, lawyers representing the company’s Trans Mountain pipeline have filed an injunction and a $6 million lawsuit for lost revenue against five people to stop protestors who are holding up survey work on Burnaby Mountain in British Colombia. Expansion of the pipeline between Alberta and the coast of British Columbia would almost triple capacity to almost 900,000 barrels of oil per day (bbl/d).
According to a story on CBCNews in Canada, a teenager recently chained himself under a Kinder Morgan worker’s vehicle, confronting a pipeline survey crew, telling them, “Go back to Texas.”
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