THE RETURN OF KINDER MORGAN!
It was long ago in the last cycle that Richard Kinder took Kinder Morgan (KMP) private and end a spectacular climb from an ipo at 7 bucks in 1997 to a takeout at 107.50 dollars for shareholders in 2007. Now its time to come back to the market and Kinder Morgan will be doing an ipo. Its a sign of the times and a sign of how good the mlp market really is these days. Normally we'd have to question the possibility of a top but given the performance of the first time around, i think i will bet with Mr Kinder in the long haul.
Its the day before Thanksgiving and my sense is much of the market moves will be done by noon as everyone begins the early getaway. Stock futures are higher this morning and yields are higher on bonds. Crude is higher and nat gas is lower. No corporate news for mlps. UBS is upgrading Spectra Energy (SEP) to neutral and the stock is bid up above its previous close in the pre market.Going to keep it short this morning as i have errands to run but i will be posting if any significant headlines break.
joseph cioffi's Source Page - Associated Content
2 comments:
Joe, understand from the link in your post and other articles that the new company (Kinder Morgan Inc., which is registered in Kansas, will change its name to Kinder Morgan Kansas Inc.) will trade under the symbol KMI, and that it will be a corporation rather than a partnership. Any thoughts on the consequences of the corporate structure on KMI's future acceptance by MLP investors, tax ramifications, dividends, growth, etc. Thanks.
Think about how perfect Richard Kinder's timing was. He orchestrates a leverage buyout of KMI in 2007. He does this practically at the top of the market. By doing so he avoids the market meltdown..gets through it..and now is ready to come public again when mlps are at all time highs. And if you look at what the investors made on the deal..they have to be thrilled.
The corporate structure just brings us back to square one again and i think the corporate structure will probably attract pretty good interest. Even with mlps doing as well as they have they are still relatively undiscovered by most players. Having your money in a Kinder venture has worked out pretty well so why not try for another ride. In fact the corporate structure might be a big advantage for growth sine they wont be dedicating cash flow to return of capital. As for taxes my view is if you make a profit..pay the tax. Its better than no profit!
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