DOW JONES NEWSWIRES
El Paso Corp. (EP) shareholders overwhelmingly approved the
company's sale to Kinder Morgan Inc. (KMI), which would create
North America's largest natural-gas pipeline operator.
Kinder Morgan agreed to buy El Paso in a cash and stock deal
valued at $21.1 billion when announced in October.
Based on preliminary results, about 79% of El Paso's shares
outstanding were voted and 95% of the votes cast were in favor of
the merger.
"We view this as a tremendous outcome for our shareholders and
customers, and we look forward to closing the transaction, which is
still expected to occur in the second quarter," said El Paso
Chairman and Chief Executive Doug Foshee.
After the closing, Kinder Morgan shareholders are expected to
own about 68% of the combined company, with El Paso shareholders
owning the remainder.
El Paso had delayed the vote from earlier this week in the wake
of last week's opinion from Delaware Chancellor Leo Strine, which
called into question whether El Paso Chief Executive Douglas Foshee
and the company's investment banks were pushing for the best deal
for shareholders.
Some shareholders had sued over the deal alleging that Goldman
Sachs, which had been advising El Paso on a separate transaction,
should not have had any role in the Kinder Morgan negotiations
because it also owned 19% of Kinder Morgan.
The merger agreement, one of the largest seen last year, comes
in the wake of a major shift in pipeline operations, caused by a
boom in natural-gas production from previously untapped reservoirs
of unconventional gas in Texas, Louisiana, and the U.S. Northeast.
Pipeline companies have been trying to redesign their routes to
connect fast-growing markets in the southern U.S. with emerging
energy production regions across North America.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com
--David Benoit contributed to this article.