Judge allows El Paso Corp. takeover to proceed
WILMINGTON | A state judge has decided against blocking Kinder Morgan Inc.’s $23.5 billion acquisition of El Paso Corp. despite claims by some investors that El Paso executives had undervalued the company to make it more attractive.
Chancellor Leo E. Strine Jr. of the Delaware Court of Chancery wrote in an opinion published Wednesday that it should be left to El Paso shareholders to approve the deal.
“El Paso stockholders should not be deprived of the chance to decide for themselves about the merger, despite the disturbing nature of some of the behavior leading to its terms,” Chancellor Strine said.
Last October, Kinder Morgan said it planned to take over El Paso. It would spin off El Paso’s production business while keeping its pipelines to become America’s largest natural gas pipeline operator. Kinder Morgan would control more than 80,000 miles of pipelines, allowing the company to negotiate more lucrative supply deals around the country.
A group of El Paso investors opposed the takeover. They argued that El Paso CEO Doug Foshee didn’t negotiate the best price for the company because he also was interested in a side deal with Kinder Morgan to buy El Paso’s production business.