May 29 (Bloomberg) -- Richard Kinder, co-founder, chairman and chief executive officer of Kinder Morgan Inc., operator of about 43,000 miles of pipelines in the U.S. and Canada, is leading a group that wants to buy the company for $100 a share or about $13.4 billion.
The group includes a fund run by Goldman Sachs Group Inc., insurer American International Group Inc. and buyout firms Carlyle Group and Riverstone Holdings LLC, according to a May 28 letter to Houston-based Kinder Morgan's board released today by the company. [...]
Kinder Morgan's network of pipelines carries oil, petroleum products like gasoline, natural gas and carbon dioxide. The company operates more than 150 terminals that transfer products such as gasoline, oil and coal, and its utilities provide natural gas to about 1.1 million customers.
Kinder Morgan Inc. was formed in July 1999, when Kinder and his partners bought KN Energy, a Colorado-based pipeline company. Kinder and Bill Morgan, another former Enron executive, formed the company that would become Kinder Morgan Energy by buying Enron's stake in natural-gas liquids and carbon dioxide lines after Kinder left the company. [...]
Last month, Washington-based Carlyle and New York-based Riverstone raised $3.8 billion to purchase power, oil and energy companies. Carlyle and Riverstone have made 19 investments in energy companies since 2000 and their Carlyle/Riverstone Global Energy & Power Fund II generated annual returns of 78 percent as of Sept. 30.
Goldman Sachs raised an $8.5 billion buyout fund in April last year and put more than $2.5 billion of the firm's money into it. The new fund's aim is to double or triple its invested capital, Richard Friedman, head of Goldman's merchant banking division, said in an interview last year.
Going private may allow Kinder to buy assets out of favor with analysts and other investors, acquisitions that could cause a drop in the stock price of a public company, said Simmons, author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.''
Kinder has been successful buying assets shunned by other investors, said [investment banker Matthew] Simmons, 63. "It's just exactly the opposite strategy that Rich Kinder's old partner, Ken Lay, did,'' Simmons said. Lay sold assets such as pipelines to build energy trading and telecommunications businesses. [...]
According to an April filing, Kinder owns 24 million shares of Kinder Morgan Inc., or about 18 percent of the company.
Let's see how this works. To reprivatize his company, Ken Lay's former partner Rich Kinder has to buy back his own shares in the publicly held company. Kinder owns 24 million shares and, with the help of Goldman Sachs and the Carlyle Group, he's generously offering himself $100 a share.
I'll do the math for you: $2.4 billion with a capital "B."
Kenny Boy, you was set up but real good. Your $70 million in Enron loans (taken in cash, but repaid in crashing stock) in 2001 seem like cow chips next to Richard Kinder's windfall of $2,400 million. As fellow Texans and energy moguls and Bush Pioneers, looking at the two of you back in 2000 no one could have guessed whose star would rise and whose would set. You and Rich Kinder were probably running about neck and neck in your competition to see who could suck up to the Bush family the most extravagantly. You even got to secretly set US energy policy in 2001 with Dick Cheney. Pretty cool!
I always had Kenny Boy pegged as a plutocrat, but he was actually a patsy. Rich Kinder is the true plutocrat. Six years later, he pulled out ahead, doing what Kenny Boy only hoped to do. He made billions, a bloody fucking fortune, and Kenny Boy's probably going to jail.
Meanwhile, while the average 401(k) account has been flat or underwater for the five long years of Bush 2, "Carlyle and Riverstone have made 19 investments in energy companies since 2000 and their Carlyle/Riverstone Global Energy & Power Fund II generated annual returns of 78 percent as of Sept. 30." Did you think your privatized Social Security account would do as well as that? Guess again.
Other strikingly odd coincidences: Poppy's 80th birthday party was thrown by none other than Rich Kinder, who also happens to have been Dubya's top career patron in 2000. Poppy, of course, is part of the Carlyle Group, which famously also included Osama bin Laden's brother on 9-11-01, and Poppy's Secretary of State James Baker, who also headed Dubya's post-election campaign (i.e., Florida) in 2000. Naturally, Henry M. Paulson, the new Treasury Secretary [!] and former CEO of Goldman Sachs, is a Bush Pioneer. And Rich Kinder's wife Nancy, who also once worked at Enron, was in charge of the invitees who paid $100,000 and $250,000 (no kidding) to Dubya's second inaugural ball.
But let's get back to the original bit of news — the multibillion dollar privatization of 43,000 miles of pipelines in North America. Of all days, what an interesting bit of news to choose to release on Memorial Day, when we're supposed to be honoring those who so recently died for the USA's flagrant ability to waste energy!
(Actually, the sacrilege was probably just an oversight. I doubt that any of this group truly gives a shit about our troops, so much so that they didn't even notice the coincidence. They were probably just waiting for the moment when Enron would fall out of the news cycle — God knows our tonedeaf media can't handle anything more complex than the monotony of their single-minded "narratives." Now that Enron as a narrative told in CNN crawls is finished, Kinder is as anonymous to big media as this teeny-tiny blog.)