Kinder Morgan, a US pipeline operator, has agreed to be bought out by its management, which has increased its offer to $15bn.

The offer, led by Richard Kinder, chairman, chief executive and co-founder of Kinder Morgan, is for $107.50 cash. With the assumption of $7bn of debt, the new offer has a total value of $22bn. The previous offer in May was for $100, or $13.6bn.

With energy prices at record levels, analysts are anticipating a rise in mergers and acquisitions in the sector. Indeed, the Kinder Morgan deal comes as Western Refining said on Monday that it would acquire Giant Industries, creating the US’s fourth largest publicly traded independent refiner and marketer.

Western will pay $83 a share in cash, in a deal valued at about $1.5bn, including about $275m of Giant’s outstanding debt.

Analysts said they had anticipated the sweetened offer for Kinder Morgan, if only to enable Mr Kinder to appear to “pass the smell test” of offering shareholders a fair price. “He knew he would end up having to do more,” said Robert Lane, vice- president of equity research at Sanders Morris Harris. “I don’t think we have ever seen a deal in which the first offer was taken.”

On May 26 – the last trading day before the investor group made its proposal on May 29 – Kinder Morgan shares closed at $84.41, giving the new bid a 27 per cent premium.

News of the sweetened deal, which is expected to be completed by early next year, pushed the shares up by 2.4 per cent to $104.17 in lunchtime trading.

As well as Mr Kinder, those seeking to acquire Kinder Morgan include other members of management – co-founder Bill Morgan and board members Fayez Sarofim and Mike Morgan – in addition to investment partners Goldman Sachs Capital Partners, American International Group, Carlyle and Riverstone Holdings. Mr Kinder will remain chairman and chief executive, and will reinvest all his shares.

The board of directors of Kinder Morgan, on the unanimous recommendation of a special committee of independent directors, has approved the agreement and will recommend Kinder Morgan stockholders approve the merger. “This buyout reflects the confidence that senior management and the sponsors have,” Mr Kinder said.

The group launched the buy-out because they felt the company was underrated in the stock market, and, analysts said, they wanted to do things that will be easier to do as a private company, such as selling some operations and growing others.

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