Kinder Morgan to Sell Rockies Pipes in deal with FTC deal with
Kinder Morgan Inc. (KMI), the second- biggest U.S. pipeline company, has reached a “tentative agreement” with federal regulators to sell about 7,200 miles of pipelines to gain approval of its $23.8 billion acquisition of El Paso Corp. (EP)
The sales, which one analyst estimated may be valued at about $3 billion, would reduce the combined company’s dominance in Rocky Mountain (RME) natural-gas transportation, while allowing the creation of the biggest U.S. gas pipeline company.
Kinder, based in Houston, agreed with the U.S. Federal Trade Commission to sell assets including its 50 percent interest in the 1,679-mile (2,700 kilometer) Rockies Express gas pipeline along with the 5,100-mile Kinder Morgan (KMI) Interstate Gas Transmission system and the 436-mile Trailblazer Pipeline Co., according to a company statement today.
Kinder said it also will sell two treatment and processing plants in Wyoming.
I was happy to read your explanation of the KMP business dealings. What I'm not happy about is watching the stock drop so much every day. Altho I've made quite a bit of $ with this stock, I'm wondering if your educated guess is that it will not continue going down--their moves are good -- and it's a stock to keep. Thank you in advance for any enlightenment-
I believe this is short lived and it's due to the selling of the above assets and a small downgrade on their credit to BBB by the ratings agency. These items are a prerequisite to the successful acquisition of El Paso.
If I had more free cash right now, this would be a great buying opportunity.
there is a history of the impact that kmi deals can have on kmp. They arevshort lived, if history is a gude. In Feb 2011' when kmi ipo'd went public, kmp fell dramatically to 71.20. by 4/26/2011, the kmi ipo was done and kmp was back to 78. Same thing will happen here, a 9% increase to 90 is predictable, because the distribution will remain at 4.98 for this year. That is a yield of 5.5% with growth. People will see this as a buying opportunity in the next two weeks.