Kinder Morgan management-led buyout proposal to be funded with $14.5 billion of debt

By Sara Rosenberg

New York, May 30 - Kinder Morgan Inc.'s management, along with a group of equity investors, have plans to use $14.5 billion of funded debt to help fund the public-to-private buyout of the company, according to a news release.

Goldman Sachs has provided the buyout group with a "highly confident" letter indicating that the financing could be raised and that it would be willing to provide the company with a commitment letter, subject to completion of due diligence, structure and documentation, and other customary conditions.

The debt would be comprised of one or more senior and/or subordinated credit facilities, the sale or placement of senior and/or subordinated debt securities and the assumption of certain existing debt, including trust preferred securities, the release said.

Under the acquisition proposal, Richard D. Kinder, chairman and chief executive officer, and other members of management, including co-founder Bill Morgan, current board members Fayez Sarofim and Mike Morgan, and investment partners Goldman Sachs Capital Partners, American International Group, Inc., The Carlyle Group and Riverstone Holdings LLC, have offered to acquire all of the outstanding stock of Kinder Morgan for $100.00 per share in cash.

The acquisition would be in the form of a merger of the company with a new acquisition vehicle that would be formed by the buyout group.

In addition to the funded debt, $2.8 billion in acquisition financing would come from equity ownership investments expected to be made by the company's senior management and $4.5 billion of equity would be provided by affiliates of the investment funds.

Kinder Morgan is a Houston-based energy infrastructure provider.

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