Wednesday, August 25, 2010

Koch could be spoiler in sale of Colonial stock to Korea

ALPHARETTA, Ga. – If you believe the media coverage, Chevron’s sale of its 23.44 percent interest in Colonial Pipeline Co. for $847 million to the National Pension Service, South Korea’s biggest investor, is a done deal.
The Korea Economic Daily reported on Aug. 23. that the pension fund was picked as a preferred bidder to buy Chevron Corp.’s 23.44 percent interest in Colonial Pipeline Co. for about one trillion won.
What the coverage did not note is that existing stockholders have right of first refusal in any sale of Colonial stock.
According to its Web site, Colonial is currently owned as follows:
23.44% - Chevron Midstream Investments
16.55% - ConocoPhillips Pipe Line Co.
15.80% - IFM(US) Colonial Pipeline 2
28.09% - Koch Capital Investments Co., LLC
16.12% - Shell Pipeline Co. LP
Before Chevron could sell its interest to National Pension Service, the other stockholders would have to waive their right of first refusal.
Of the existing stockholders, the one with the most to gain by exercising its right would be Koch Capital Investments, a subsidiary of Koch Industries. By adding 23.44 percent to its existing 28.09 percent interest, Koch would end up with a 51.53 percent controlling interest in Colonial.
Koch Industries already owns Atlanta-based Georgia-Pacific.


  1. Interesting to see a non-energy company buy into Colonial. It's also real different than the original investors.