Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): August 28, 2006
KINDER
MORGAN, INC.
(Exact
name of registrant as specified in its charter)
|
Kansas
(State
or other jurisdiction
of
incorporation)
|
1-06446
(Commission
File
Number)
|
48-0290000
(I.R.S.
Employer
Identification
No.)
|
500
Dallas Street, Suite 1000
Houston,
Texas 77002
(Address
of principal executive offices, including zip code)
713-369-9000
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
x
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry Into a Material Definitive Agreement.
On
August
28, 2006, Kinder Morgan, Inc., a Kansas corporation (the “Company”), entered
into an Agreement and Plan of Merger (the “Agreement”) with Knight Holdco LLC, a
Delaware corporation (“Parent”), and Knight Acquisition Co., a Kansas
corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). Under the
terms of the Merger Agreement, Merger Sub will be merged with and into the
Company, with the Company continuing as the surviving corporation and a
wholly-owned subsidiary of Parent (the “Merger”). Parent is owned by a
consortium of private investment firms affiliated with GS Capital Partners
V
Fund, L.P., AIG Global Asset Management Holdings Corp., Carlyle Partners IV,
L.P. and Carlyle/Riverstone Energy Partners III, L.P. (collectively, the
“Sponsors”).
At
the
effective time of the Merger, each outstanding share of common stock of the
Company (the “Common Stock”), other than any shares owned by Parent, Merger Sub,
the Company or its subsidiaries, any stockholders who are entitled to and who
properly exercise appraisal rights under Kansas law and the Rollover
Stockholders (as defined below), will be cancelled and converted into the right
to receive $107.50 in cash, without interest.
The
Board
of Directors of the Company approved the Merger Agreement on the unanimous
recommendation of a Special Committee comprised entirely of independent
directors (the “Special Committee”).
The
Chairman and Chief Executive Officer of the Company, Richard D. Kinder, together
with certain other members of management, Company co-founder Bill Morgan, and
two current members of the Company’s Board of Directors, Fayez Sarofim and Mike
Morgan (collectively, the “Rollover Stockholders”) have agreed, at the request
of the Sponsors, to contribute a portion of their Company equity into Parent.
Richard D. Kinder has also agreed to vote his shares in favor of the Merger.
The
Company has made customary representations, warranties and covenants in the
Agreement, which expire at the effective time of the Merger. The Company may
not
solicit competing proposals or, subject to exceptions that permit the Company’s
Board of Directors (or the Special Committee) to take actions required by their
fiduciary duties, participate in any discussions or negotiations regarding
alternative proposals.
Parent
has obtained conditional equity and debt financing commitments for the
transactions contemplated by the Agreement, the aggregate proceeds of which
will
be sufficient for Parent to pay the aggregate merger consideration and all
related fees and expenses. Consummation of the Merger is not subject to a
financing condition, but is subject to various other conditions, including
approval of the Merger by the Company’s stockholders, expiration or termination
of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, and other customary closing conditions. The parties expect to
close
the transaction by early 2007.
The
Agreement may be terminated under certain circumstances, including if the
Company’s Board of Directors (or the Special Committee) has determined in good
faith that it has received a superior proposal and otherwise complies with
certain terms of the Agreement. Upon the termination of the Agreement, under
specified circumstances, the Company will be required to reimburse Parent and
Merger Sub for their transaction expenses up to $45,000,000 and under specified
circumstances, the Company will be required to pay Parent a termination fee
of
$215,000,000. Additionally, under specified circumstances, Parent will be
required to pay the Company a termination fee of $215,000,000. The Sponsors
have
severally agreed to guarantee their proportionate liability of any such amounts
payable by Parent to the Company.
The
foregoing summary of the Agreement and the transactions contemplated thereby
does not purport to be complete and is subject to, and qualified in its entirety
by, the full text of the Agreement, which is attached as Exhibit 2.1 and
incorporated herein by reference.
The
Special Committee engaged The Blackstone Group L.P. ("Blackstone") and Morgan
Stanley & Co. Incorporated ("Morgan Stanley" and, together with Blackstone,
the "Financial Advisors") to serve as financial advisors to the Special
Committee. On August 27, 2006, Blackstone and Morgan Stanley each delivered
an
opinion to the Special Committee and the Board of Directors that, as of the
date
of the opinion, the merger consideration was fair, from a financial point of
view, to the stockholders of the Company (other than Parent, Merger Sub and
the
Rollover Stockholders).
The
Agreement has been included to provide investors and security holders with
information regarding its terms. It is not intended to provide any other factual
information about the Company. The representations, warranties and covenants
contained in the Agreement were made only for purposes of such agreement and
as
of specific dates, were solely for the benefit of the parties to such agreement,
and may be subject to limitations agreed upon by the contracting parties,
including being qualified by confidential disclosures exchanged between the
parties in connection with the execution of the Agreement. The representations
and warranties may have been made for the purposes of allocating contractual
risk between the parties to the agreement instead of establishing these matters
as facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors
are not third-party beneficiaries under the Agreement and should not rely on
the
representations, warranties and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of the Company,
Parent, or Merger Sub or any of their respective subsidiaries or affiliates.
Moreover, information concerning the subject matter of the representations
and
warranties may change after the date of the Agreement, which subsequent
information may or may not be fully reflected in the Company’s public
disclosures.
Important
Additional Information Regarding the Merger will be Filed with the
SEC:
In
connection with the proposed Merger, the Company will file a proxy statement
with the Securities and Exchange Commission (the "SEC"). INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES
TO THE MERGER. Investors and security holders may obtain a free copy of the
proxy statement (when available) and other relevant documents filed with the
SEC
from the SEC’s website at http://www.sec.gov. The Company’s security holders and
other interested parties will also be able to obtain, without charge, a copy
of
the proxy statement and other relevant documents (when available) by directing
a
request by mail or telephone to Investor Relations, Kinder Morgan, Inc., 500
Dallas Street, Suite 1000, Houston, Texas 77002, telephone (713) 369-9490,
or
from the Company’s website, www.kindermorgan.com.
The
Company and its directors, executive officers and other members of its
management and employees may be deemed to be participants in the solicitation
of
proxies from the Company’s stockholders with respect to the Merger. Information
about the Company’s directors and executive officers and their ownership of the
Company’s common stock is set forth in the proxy statement for the Company’s
2006 Annual Meeting of Stockholders, which was filed with the SEC on April
3,
2006. Stockholders and investors may obtain additional information regarding
the
interests of the Company and its directors and executive officers in the Merger,
which may be different than those of the Company’s stockholders generally, by
reading the proxy statement and other relevant documents regarding the Merger,
which will be filed with the SEC.
Item
7.01 Regulation FD Disclosure.
In
accordance with General Instruction B.2. of Form 8-K, the following information
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933,
as
amended, or the Exchange Act.
On
August
28, 2006, the Company issued a press release announcing that it had entered
into
the Agreement. A copy of the press release is attached as Exhibit 99.1
hereto.
Forward-Looking
Statements
This
Current Report and the exhibits furnished herewith contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933,
as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements include statements regarding expectations
as to
the completion of the Merger and the other transactions contemplated by the
Agreement. The forward-looking statements contained herein involve risks and
uncertainties that could cause actual results to differ materially from those
referred to in the forward-looking statements. Such risks include, but are
not
limited to, the ability of the parties to the Agreement to satisfy the
conditions to closing specified in the Agreement. More information about the
Company and other risks related to the Company are detailed in the Company’s
most recent annual report on Form 10-K for the fiscal year ended December 31,
2005, and its quarterly reports on Form 10-Q and current reports on Form 8-K
as
filed with the SEC. The Company does not undertake an obligation to update
forward-looking statements.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits:
| Exhibit
2.1 |
Agreement
and Plan of Merger, dated as of August 28, 2006, among the Company,
Knight
Holdco LLC and Knight Acquisition
Co.*
|
| Exhibit
99.1 |
Press
Release, dated August 28,
2006
|
|
*
|
Schedules
and Exhibits omitted pursuant to Section 601(b)(2) of Regulation
S-K. The
Company agrees to furnish supplementally a copy of any omitted schedule
to
the SEC upon request.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
KINDER
MORGAN, INC.
By /s/
Joseph
Listengart
Name: Joseph
Listengart
Title: Vice
President and General
Counsel
|
Date:
August 28, 2006
EXHIBIT
INDEX
| Exhibit
2.1 |
Agreement
and Plan of Merger, dated as of August 28, 2006, among the Company,
Knight
Holdco LLC and Knight Acquisition
Co.*
|
| Exhibit
99.1 |
Press
Release, dated August 28, 2006
|
|
*
|
Schedules
and Exhibits omitted pursuant to Section 601(b)(2) of Regulation
S-K. The
Company agrees to furnish supplementally a copy of any omitted schedule
to
the SEC upon request.
|