Tags: el paso | kinder morgan | energy | m&a

Proxy Adviser Opposes El Paso-Kinder Morgan Deal

Tuesday, 06 March 2012 04:38 PM

Shareholders of El Paso Corp. should vote against a proposed $23 billion sale of the company to Kinder Morgan Inc. due to conflicts of interest in the sale process, Egan-Jones Proxy Services said in a report on Tuesday.

El Paso will hold a special meeting of shareholders on Friday to vote on the deal, which will combine the two largest operators of natural gas pipelines in North America.

The company on Monday postponed the vote for three days to give shareholders more time to consider last week's ruling by Delaware Chancery Court judge Leo Strine.

The judge called the negotiating process "disturbing" but refused a shareholder request to block the acquisition, saying shareholders should decide for themselves if they want to accept the deal.

Egan-Jones said it was withdrawing its previous recommendation in favor of the deal following Strine's "blistering" opinion.

While Strine's opinion has swayed some to vote their proxies against the deal, El Paso said on Monday 70 percent of the company's shares have been voted, with 98.5 percent supporting the deal. Those votes can be changed up until the Friday deadline.

Egan-Jones is the smallest of the three main proxy advisory firms. The two leading firms, Institutional Shareholder Services Inc and Glass, Lewis & Co LLC, have both recommended El Paso shareholders support the deal.

In late trading on the New York Stock Exchange, El Paso shares were down 1.5 percent at $28.07 and Kinder Morgan shares were down 2.4 percent at $35.35.

© 2019 Thomson/Reuters. All rights reserved.

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Tuesday, 06 March 2012 04:38 PM
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