(Reuters) - El Paso Corp EP.N delayed a shareholder meeting for voting on the pipeline company’s roughly $23 billion acquisition by rival Kinder Morgan Inc (KMI.N) to give investors more time to consider a judge’s ruling that criticized some of the deal’s participants.
El Paso said the meeting would be held Friday, instead of Tuesday.
While shareholders can still change their votes before the meeting, the company said on Monday that about 70 percent of its outstanding shares had already been voted as of March 2. More than 98.5 percent of those shares were voted in favor of the deal, El Paso said.
The company needs a majority of the votes cast in order to receive shareholder approval of the sale.
Delaware Chancery Court Judge Leo Strine refused to block the sale last week, but said some of the behavior that led to the deal was disturbing. A shareholder group had sued to stop the deal, arguing that El Paso adviser Goldman Sachs Group Inc (GS.N) and El Paso Chief Executive Douglas Foshee had interests in holding down the price for the company.
Strine’s opinion swayed at least one investment adviser, who said he plans to vote against the deal.
“When we went through (the opinion), we went ‘Holy Christ, you can’t vote in favor of something like this,'” said Greg Kinczewski, the general counsel for Marco Consulting Group.
His firm manages proxy votes for clients such as union pension funds that collectively hold 2.2 million El Paso shares. There are about 770 million El Paso shares outstanding, according to Reuters data.
Adam Pritchard, a professor at the University of Michigan Law School, said postponing the shareholder meeting will help El Paso undercut potential claims that the shareholder vote was tainted because investors did not know about the Delaware court’s criticisms.
El Paso spokesman Richard Wheatley did not comment directly on whether the postponement was aimed at deflecting criticism of the voting, except to say shareholders were being given more time to consider “recent events.” He said the company was acting on the advice of its proxy counsel.
El Paso shares were up 6 cents to $28.41 in afternoon trading on the New York Stock Exchange.
Reporting By Michael Erman and Tom Hals; Editing by Gerald E. McCormick and Mark Porter