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NEW YORK (
TheStreet) -- Private equity firms
Blackstone(BX - Get Report) and
TPG Capital are circling
El Paso's(EP) upstream oil and gas exploration and production assets, which are up for sale after the company's $21 billion merger with
Kinder Morgan(KMI - Get Report) in October.
Buyers are reviewing pitch books of Kinder Morgan's bankers
Barclays Capital(BCS) and
Evercore Partners in a potential sale that may fetch as much as $10 billion, the
Wall Street Journal reports. Kinder Morgan also has a loan commitment from Barclays Capital to raise nearly $15 billion for its El Paso acquisition.
The Kinder Morgan takeover represented a change of strategy for El Paso, who in March, said it would spin its exploration and production businesses to shareholders, which operate oil & gas fields in Egypt and Brazil. At the time, the company's upstream operations accounted for 66% of its $4 billion in overall revenue. By changing strategy and agreeing to a Kinder Morgan takeover, the combination of both pipeline operations are set to create the nation's largest natural gas pipeline and fourth largest overall energy company in the U.S.
Aside from financing from Barclays, sale of El Paso's exploration business was a crucial piece for Kinder Morgan's blockbuster takeover bid. Kinder will first sell El Paso's exploration and production businesses for cash proceeds to Kinder Morgan that will lower debt levels needed to make the acquisition. In addition, it will sell El Paso's gas pipeline business to
Kinder Morgan Energy Partners(KMP) and
El Paso Pipeline Partners(EPB) over the next few years.
When announcing the takeover, Kinder Morgan said that by the end of 2015 its combined assets will consist exclusively of its general partner interests in Kinder Morgan Energy Partners and El Paso Pipeline.
The merger recently came under scrutiny when Louisiana Municipal Police Employees Retirement System filed a shareholder lawsuit against El Paso's advisor
Goldman Sachs(GS - Get Report) for its role in steering El Paso toward a takeover at what they say is a price below the company's previous spin strategy. Goldman is also Kinder Morgan's second largest shareholder with a 20% percent stake, which the suit says creates a conflict of interest.
The takeover valued El Paso at $38 billion including El Paso's outstanding debt -- or $26.87 a share, a 37% premium to their closing price prior to the announcement.
Goldman Sachs along with
The Carlyle Group's Riverstone fund,
AIG Financial Products and an AIG-related hedge fund called Highstar Capital, took the pipeline giant private in 2006 at $107.50 a share. In February, they did a public offering of the company in one of the largest IPO's of the year.
Vivendi may sell up to $431 million of
Activision Blizzard(ATVI - Get Report), or 35 million shares, for as much as $12.30,
Bloomberg reports citing two people with knowledge of the deal.
Activision Blizzard shares fell over 4% to $12.28 in early trading on news of the Vivendi share sale. After reaching a post-crisis peak of $14.40 a share earlier in November, Activision shares have fallen and are now down over 1% year-to-date.
Vivendi bought a controlling 52% stake in Activision, the world's largest video game publisher in 2007 for $9.8 billion. The stake purchase valued Activision shares at $27.50 each, meaning that a disposal will lead to a nearly 50% loss.
Santa Monica, Calf., -based Activision makes video games ``Guitar Hero'' and ``Call of Duty'', while Vivendi's Blizzard unit makes top seller "World of Warcraft." When combined Activision Blizzard's revenue of $4.4 billion in 2010 made it the largest video games publisher, outpacing
Electronic Arts(ERTS) $3.6 billion 2010 revenue. Prior to the combination, Electronic Arts was the industry leader.
Activision, which in September reported earnings of nearly $150 million in the third quarter, is on track to more than double profits in 2011 after reporting a profit of $418 million in 2010.
Bank of America(BAC - Get Report) may sell its shares of China Construction Bank to Singaporean sovereign wealth funds
Temasek, according to reports from Bloomberg.
On Monday, Bank of America said it was looking to sell 10.4 billion of its China Construction bank shares, at a profit of $1.8 billion, while retaining a 1% stake in the Chinese lender, which is one of the country's biggest banks.
For Bank of America, the stake sale is a move to shore up its balance sheet and take advantage of deferred tax assets. "Our decision to sell the bulk of our remaining shares in China Construction Bank is consistent with our stated objective of continuing to build a strong balance sheet," said Chief Financial Officer Bruce Thompson in a statement announcing the move Monday. It's also potentially a decision to lock in gains in China Construction Bank, which have fallen nearly 20% year-to-date. Bank of America shares rose nearly 2% in early trading to $6.17 a share, but have fallen over 50% year-to-date.
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