if you want to be in KMI over the long haul the place to enter is in KMR.
Purchasing KMP now, will cause an unneccessary tax event upon completion of the merger, while KMR is a straight stock for stock swap with no tax event.
There is stil 2-3% arbitrage difference between KMI and KMR which is yours if you enter via KMR
On what grounds would the FTC not grant the conversion ? Its a merger of a single business just different organizational entities there aren't any monopoly concerns or other related harm to the consumers.
The IRS has nothing to do with the FTC
boy are you a sourpus spouting utter nonsense and causing FUD.
You only have 5 posts. are you actually a short playing kmi arbitrage ?
ete is in a different position than kmi cause ete is an mlp as well as a GP. It doesn't suffer from the high tax rate that KMI does from the pricey IDRs. ETE has also deferrred a bunch of the IDRs to allow etp and others to absorb the assets and grow.
More consolidation of the assets at the etp, rgp sxl level would be cool.
if you properly account for all of the tax deferred income that they have received and the recent 20% gain in share price it is a VERY sweet deal.
diversification as the KMP limited partners are bein forced into a taxable event. Anybody worth their beans will take the opprtunity for forward investment decisions, including moving some of the monies into other MLP vehicles.
1) Way more then 50% of KMP also owns KMI, so more then 90% of them vote yes
where did you get those stats....
and oh btw currently if you want to own KMI you should be buying KMR
I quoted share price,since market cap is based on share price and one share of KMP is equivalent to 1 share of KMR, it works fine.
The conversion price is based on two simple facts:
1. market capitalization prior to the announcement.
KMP ~ 80
2. relative equity share of the enterprise. One KMR is equal to one KMP.
each unit of KMP is one unit of the Kinder Morgan LP,
each unit of KMR is one unit of the internal Kinder Morgan LP shares which are also equivalent to one unit of KMP.
so do the simple math on that based on what a single unit of KMR is based on and you will get the conversion price.
Kinder has absolutely no obligation to compensate users for taxes on any $$ received. So why the sense of entitlement that Kinder should compensate shareholders for taxes either directly or indirectly via a higher conversion price ?
I mean yes to depreciation and other taxes sheltering
yes ... some of the tax boom for the government comes from the long term KMP holders that have a lot of deferred taxes on ordinary income.
if your intention is to hold a linn energy position for lt growth or income it doesn't matter if it drops back a wee bit in the short term. Important thing is you got in cheaper and used less capital when you traded out of line. I would stay in the vehicle (LNCO or LINE) that fits my tax requirements,
yeah thats kind of long 6 months, but its ok if its part of your long term position. I bot lnco near the bottom last year, and didn't take profit till June.While my main holding has been line.