Goldman Sachs and Carlyle Group are cashing out a portion of their stakes in Kinder Morgan after the pipeline giant closed its transformative purchase of El Paso last month.
- Associated Press
Goldman, whose Kinder stake drew criticism during the El Paso deal, is selling 36.7 million shares of its current 134.8 million shares in the offering, which was priced at $31.88, a 3.5% discount to Tuesday’s close. Goldman’s take would be about $1.2 billion.
Carlyle is selling 12.7 million shares of its 51.2 million shares and another 13.6 million of shares held by an investment fund affiliated with it.
The private-equity firms’ stakes stem from the buyout of Kinder Morgan in 2006 led by founder Richard Kinder. The company went public again last February and then pulled the trigger on the deal to buy El Paso, creating a massive pipeline network for the natural gas industry.
But the deal was rife with controversy, largely because of Goldman Sachs’s involvement. The investment bank was the long-time banker of El Paso and continued to do work for the target despite the private-equity arm’s substantial investment in Kinder Morgan.
A shareholder lawsuit over the deal alleged the bank had a conflict of interest that could have swayed its advice to El Paso and a Delaware judge, while allowing the deal to go through, criticized the bank heavily in an opinion.
Goldman Sachs maintained the units were separate and that it handled its conflicts properly and stepped back from advising on the actual deal. Kinder Morgan and El Paso both maintained the deal was done at a full and fair price and shareholdersoverwhelming approved it when it came to a vote.
Kinder Morgan shares are up about 2.6% this year heading into Wednesday and the secondary offering’s price is slightly higher than the $30 IPO price.
- As an Adviser, Goldman Guaranteed Its Payday (dealbook.nytimes.com)
- ANDREW ROSS SORKIN: Goldman Sachs Totally Screwed Over A Company It Advised On Sale (businessinsider.com)
- El Paso Holders Approve Kinder Morgan Deal (blogs.wsj.com)
- Kinder Morgan completes $21 billion mega-deal with El Paso (fuelfix.com)
- El Paso delays vote on Kinder Morgan deal (business.financialpost.com)
- Goldman’s Double Game (businessweek.com)
- El Paso shareholders approve Kinder Morgan takeover (bizjournals.com)
- Kinder Morgan Closes Conflicted El Paso Deal, Expects More Savings (blogs.wsj.com)
- Kinder Morgan to take over El Paso building (bizjournals.com)