Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Goldman Sachs May Get $20 Million for El Paso Sale Advice

Don't Miss Out —
Follow us on:

Nov. 10 (Bloomberg) -- Goldman Sachs Group Inc., the fifth-biggest U.S. bank by assets, will get a $20 million fee for advising El Paso Corp. if the pipeline company completes a planned $21 billion sale to Kinder Morgan Inc.

Goldman Sachs is the second-largest shareholder of Kinder Morgan and has two directors on the Houston-based pipeline company’s board. Goldman Sachs didn’t take part in negotiations with Kinder Morgan or express an opinion on the deal price, Kinder Morgan said today in a regulatory filing.

Goldman Sachs had been advising Houston-based El Paso on an unrelated plan to spin off the company’s exploration and production division when Kinder Morgan made an unsolicited offer, Kinder Morgan said. Goldman Sachs collected $5 million for that work and would have gotten another $25 million if the spinoff had been completed, Kinder Morgan said.

Goldman Sachs’s private-equity arm invested alongside Kinder Morgan Chief Executive Officer Richard Kinder to take his company private in a 2007 leveraged buyout, and the New York-based investment bank retains a stake after an initial public offering this year. Goldman Sachs directors on the Kinder Morgan board, Henry Cornell and Kenneth Pontarelli, didn’t take part in discussions about the El Paso offer, Kinder Morgan said.

Morgan Stanley advised El Paso on negotiations with Kinder Morgan and gave an opinion that the sale price was fair. The bank may collect a total of $35 million for its advice if the deal is completed, Kinder Morgan said.

Kinder Morgan’s financial advisers, Evercore Partners Inc. and Barclays Plc, will get a total of $15 million each if the acquisition is completed, Kinder Morgan said.

Andrea Rachman, a Goldman Sachs spokeswoman, declined to comment.

To contact the reporter on this story: Zachary R. Mider in New York at zmider1@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net.