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 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.
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
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.
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.
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.
boy are you a sourpus spouting utter nonsense and causing FUD.
You only have 5 posts. are you actually a short playing kmi arbitrage ?
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
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
if the deal for KMP gets sweetened (not likely) they will have to also sweeten it for EPB and KMR.
I don't believe you but ...
if so assuming you have 3,000 shares of KMP you now have a capital gain around 50 or 60K.and if you have held the shares for 5 years you may have accumulated 80K in ordinary income that you have NOT paid income tax on, and your complaining and whining because you have to pay income tax on 130K that you made from investing around 135K?
disclaimer: these are very rough numbers and are meant to just ballpark what some think they are entitled to.
yes it is gettin old, it would be a lot more productive if it were to pull back sharply and bounce back strongly than this slow drip down. Pattern suggests profit taking sellers frustrated waiting for it to bounce, finally give up and throw in the towel selling little by little as it drops.
Your forgetting that A billion dollar project has to be financed. The financing will be cheaper after the reorg. Thats a big deal.
well I already sold all my KMI.
If I owned KMP I would seriously consider selling into the rips. Partly because of the tax issue and partly to capture at least some of the profit right away..
I intend to hold some kmi long term, so I added to my KMR position, but some of kmi monies are moving to other MLPs to rebalance my portfolio, since kmi is qualified divs.