NEWSMAKER-UPDATE 1-Rich Kinder: Big deals, major philanthropist
* Big donor to education, children
(Adds links to Breakingviews columns, Insider program)By Anna DriverHOUSTON, Oct 17 (Reuters) - Judging by Wall Street’s warm
embrace of Richard Kinder’s $21 billion deal to buy El Paso
Corp, he is still — to borrow the phrase once used to describe
his former Enron colleagues — the smartest guy in the room.With the deal, the Texas billionaire who started his
business in 1997 by buying pipeline assets from Enron for $40
million, will create the largest oil and gas transportation
company in North America with 80,000 miles of pipeline.Analysts applauded the deal, which used Kinder Morgan’s
relatively high stock valuation and relatively low cost of
capital to pick up the nation’s largest natural gas network.”He’s still perceived to be the smart guy out of the old
Enron organization,” said Duane Grubert, an analyst at
Susquehanna Financial Group. “The respect for his creative
dealmaking continues to be really high.”If Kinder, CEO and chairman of Houston-based Kinder Morgan
Inc (KMI.N), manages to sell off El Paso’s (EP.N) exploration
and production assets around the same time the deal closes, he
could almost immediately pay back most of the money his company
is borrowing for the $11.5 billion cash portion of the deal.Kinder Morgan’s shares rose as much as 10 percent on
Monday, the day after the deal was announced. [ID:nN1E79F06X]>^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^For Breakingviews columns on the deal, please click on[ID:nN1E79G0GN] [ID:nN1E79F0BG]For a Reuters Insider program click on:link.reuters.com/xed54s^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>Kinder Morgan was put together through a string of deals,
including some with marquee private equity names including
Carlyle Group [CYL.UL], Goldman Sachs Inc’s (GS.N) buyout arm
Highstar Capital and Riverstone Holdings.”This is not the first rodeo we’ve done,” Kinder reminded
analysts on a conference call with investors on Monday.HEIR APPARENTKinder, a Missouri native, joined Florida Gas in the early
1980s and was reunited with University of Missouri friend
Kenneth Lay when Lay’s Houston Natural Gas acquired the Florida
company.In 1985, Houston Natural Gas merged with Nebraska’s
InterNorth to form Enron Corp, with Lay as CEO.As Enron’s president and chief operating officer, Kinder
was known as the guy who made the trains run on time and kept
spending in check.Unlike Lay, whose extravagant lifestyle included a liking
for Gulfstream jets with catered lunches, Kinder was satisfied
with a cheaper Cessna for quick business trips.Until the mid-1990s, Kinder, now 66, had been considered
Lay’s heir apparent as CEO. But Jeffrey Skilling, whom Enron
had poached from consultancy McKinsey & Co years earlier,
caught Lay’s attention by engineering Enron’s transformation
from a pipeline company into a trading giant and became the
CEO-in-waiting.Kinder left Enron in December 1996, and in February 1997 he
founded Kinder Morgan with longtime friend Bill Morgan, the
pair having spent about $40 million to acquire some Enron
pipeline and associated assets that the energy giant no longer
considered core to its ambitious operations.Enron collapsed in 2001, its demise chronicled in a
best-selling book “The Smartest Guys in the Room,” by Bethany
McLean and Peter Elkind.In December 2006 Kinder, then-retired Morgan and other
members of the board, including Houston financier Fayez
Sarofim, acquired Kinder Morgan for $15 billion and took it
private.STRAIGHT SHOOTERKinder, who ranks 46th on Forbes’ list of richest
Americans, has an estimated worth of $6.4 billion, according to
the magazine.Still, the affable and plain-spoken executive parks in the
same garage as his employees and is often spotted in his office
building lobby sporting short-sleeved shirts, not the dark suit
normally expected of an oil industry billionaire.Kinder, who served as a captain in the U.S. Army in
Vietnam, and wife Nancy are generous donors to a number of
philanthropies benefiting education and children.They are a fixture on Houston’s social circuit, often
appearing in photos in magazines and websites that chronicle
the city’s glitterati.”Both of them are some of the most highly philanthropic
people in this city,” said Shelby Hodge, editor-at-large for
Houston’s dominant social and entertainment website,
culturemap.com. “They are straight shooters and very careful
stewards of that money.”Kinder’s mother was a schoolteacher and in her memory, the
couple has lavished on millions on the cause of furthering
education, Hodge said.Through a foundation, the Kinders have already given
millions to fund an urban research institute at Rice University
in Houston, a program to award teachers, and a research effort
to screen middle-school students with difficult-to-detect heart
abnormalities.Kinder and his wife have also joined the Giving Pledge
movement, launched by Warren Buffett and Bill Gates, by
committing to give the majority of their wealth to charity.Kinder Morgan shares closed 4.8 percent higher at $28.19 on
a day that the S&P 500 index fell 2 percent.
