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Kinder Morgan Energy Partners Message Board

  • rjraecek rjraecek Dec 27, 2010 2:32 PM Flag

    Going Public?

    What advantage would there be to buy "Kinder Morgan" if they go public as reported in the WSJ this morning?
    I am a holder of KMP for the tax advantage and of course the qrtly distributions.
    Would going public have an negative effect on KMP?

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    • KMI going public should have no direct effect on KMP (although the market might react in weird ways...never rule that out). Now KMP's GP is private...soon it will be public. KMP/R should roll along as before.

      KMI was once public before. Then it was taken private 3 years ago in a $22B buyout by Richard Kinder and some investment banks & funds(including the Carlyle Group, Goldman Sachs and AIG). My POV is they took it private when they felt it was substantially undervalued by the market. Turns out they were right.

      When the IPO was first in the news last July, Bloomberg said the investors in taking KMI private did well, estimating their pretax investment had increased in value by 126%. Not bad for a 3 year investment.

      All stock sold through the IPO is currently owned by the investors in the privatization; no new shares will be created or sold. Not all the current owners will be selling; Richard Kinder intends on keeping his 31% share of KMI. I haven't read the prospectus in detail to figure out what is going to happen to KMI's direct ownership of KMP units and KMR shares...KMI owns a healthy chunk of each.

    • That is KMI, the eneral partner.