El Paso Reschedules Kinder Morgan Merger Vote

El Paso Corp. (EP) has postponed a special meeting for shareholders to decide whether to approve a takeover by Kinder Morgan Inc. (KMI) after a Deleware court denied challenges to the merger.

El Paso shareholders will vote Friday, three days after originally scheduled, to approve the $21.1 billion takeover that would create the largest natural gas pipeline company in the country. The postponement will give shareholders "additional time to consider" the Delaware Court of Chancery's March 1 opinion, El Paso said.

El Paso shareholders had argued that the deal contained too many conflicts of interest. Goldman Sachs Group (GS) was the banker for El Paso while its private equity operations owned a 19% stake in Kinder Morgan, and El Paso Chief Executive Douglas Forshee was also privately interested in buying some of El Paso's businesses back from Kinder Morgan after the merger was completed.

The Delaware judge said the deal process could continue but critized its handling, adding that shareholders still have time to prove the deal was "tainted by disloyalty."

-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201; [e-mail]