Judge al­lows El Paso Corp. takeover to pro­ceed

The Washington Times Daily - - Business -

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.

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