Seeking Alpha

Williams details proposal to merge with Access Midstream

  • Williams Cos. (WMB +0.6%) completes its acquisition of the 50% general partner interest and 55.1M limited partner units in Access Midstream Partners (ACMP +1%).
  • WMB says the merged MLP would have a 2015 distribution increase of at least 25% above ACMP's current guidance of $2.79/unit, would have a best-in-class distribution growth rate of 10%-12% annually through 2017, and enjoy strong investment-grade ratings: WMB foresees distribution coverage of ~1.2x in 2015 and at or above 1.1x through 2017.
  • Howard Weil raises its target price for WMB to $68 from $43, noting that not only has ACMP been one of the fastest growing MLP's but the assets are essentially in all of the growing U.S. basins, with the largest drivers of growth in WMB's wheelhouse in the Northeast, the Gulf Coast and the Rockies (Briefing.com).
Comments (2)
  • glf4mny
    , contributor
    Comments (424) | Send Message
     
    Howard Weil is a bit late with this target, from $43 to....WMB went to $58 in mid-June.
    1 Jul 2014, 05:18 PM Reply Like
  • 27975573
    , contributor
    Comments (304) | Send Message
     
    Besides being late; he did not highlight the true recipients of the distribution increases. The MLP arm of Williams is WPZ (the partnership arm).
    I can see WPZ moving into low $60's.
    2 Jul 2014, 10:32 AM Reply Like
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