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Kinder Morgan Consolidation Yielding Short-Term Bonanza For Investors

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The three acquisition targets of Kinder Morgan's (NYSE: KMI) $71 billion consolidation plan moved sharply higher Monday, while Kinder Morgan itself had gained more than 17 percent.

Energy pipeline giant Kinder Morgan said Sunday evening it will pay 2.1931 KMI shares and $10.77 in cash for each unit of its Kinder Morgan Energy Partners LP (NYSE: KMP) affiliate, or a 12 percent premium over Friday's closing price. KMP changed hands recently up 16 percent to $93.82.

Kinder Morgan Management, LLC (NYSE: KMR) shareholders would receive the 2.4849 KMI shares for each share in the consolidation deal, a 16.5 percent premium from Friday's price. KMR shares gained 23 percent recently to $194.72.

El Paso Pipeline Partners L.P. (NYSE: EPB) holders are set to receive 0.9451 KMI shares and $4.65 in cash for each EPB unit, a 15.4 percent premium over Friday. EPB shares jumped 20 percent to $40.44.

At the same time at least two purported class action suits were announced, claiming the companies failed to engage in a "full and fair auction, thus breaching fiduciary responsibilities to investors."

Kinder Morgan traded recently at $39.08, up 8.1 percent from Friday's close.

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