Acquisition Of Copano Energy, L.L.C. By Kinder Morgan Energy Partners, L.P. May Not Be In Copano Energy, L.L.C. Shareholders' Best Interests
SAN DIEGO and HOUSTON, Jan. 30, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP are investigating the acquisition of Copano Energy, L.L.C. (NASDAQ: CPNO) by Kinder Morgan Energy Partners, L.P. (NYSE: KMP). Copano Energy provides midstream services to natural gas producers in the United States, including natural gas gathering, compression, dehydration, treating, marketing, transportation, processing, and fractionation.
On January 29, 2013, Kinder Morgan Energy Partners and Copano Energy announced a definitive merger agreement whereby Kinder Morgan Energy Partners will acquire all of Copano Energy's outstanding units for a total purchase price of approximately $5 billion, including the assumption of debt. In addition, Kinder Morgan Energy Partners will acquire 100% of Eagle Ford Gathering (currently a joint venture with Copano Energy), which provides gathering, transportation, and processing services to natural gas producers in the Eagle Ford Shale. The transaction has been approved by the board of directors of both companies and is expected to close in the third quarter 2013.
The Board of Directors' Actions May Prevent Copano Energy Shareholders from Receiving the Maximum Value for Their StockRobbins Arroyo LLP's investigation focuses on whether the board of directors at Copano Energy is undertaking a fair process to obtain maximum value and adequately compensate its shareholders in light of the proposed acquisition. The $40.91 per share offer price is below the $41.00 target price, which has been projected by an analyst at Ladenburg Thalman & Co. since November 12, 2012. Further, on November 7, 2012, Copano Energy reported financial results for the third quarter 2012, which reflect a 4% increase in revenue from the third quarter 2011 and a 15% increase from the second quarter 2012. In addition, Copano Energy's GAAP EPS of $0.23 for the third quarter 2012 comfortably beat analyst estimates of $0.06 by 271%. In a company press release, Copano Energy President and Chief Executive Officer R. Bruce Northcutt said, "Our third quarter results highlight our strengthening operational performance and continued progress in executing on our Eagle Ford strategy." Given these facts, the firm is examining the board of directors' decision to sell Copano Energy now rather than allow shareholders to continue to participate in the company's continued success and future growth prospects.
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