Addressing The Williams Chesapeake Exposure
Williams Companies: Playing The Gas Infrastructure Super-Cycle
Stanislav Ermilov • 26 Comments
Stanislav Ermilov • 26 Comments
Mon, May 16, 3:33 AM
- Energy Transfer Equity (NYSE:ETE) says the recent litigation announced by Williams Cos. (NYSE:WMB) to prevent the two from ending their merger deal will result in a delay in the buyout.
- Williams filed another lawsuit against Energy Transfer Equity in a Delaware court on Saturday, this time to prevent the latter from terminating its agreement or avoiding its obligations in the event it fails to obtain a key tax opinion.
- Previously: Williams files suit to prevent Energy Transfer from ending merger deal (May. 14 2016)
Sat, May 14, 7:07 AM
- Williams Cos. (NYSE:WMB) says it filed a lawsuit yesterday in Delaware against Energy Transfer Equity (NYSE:ETE) to prevent ETE from terminating its merger agreement or avoiding its obligations in the event it fails to obtain a key tax opinion.
- WMB's board says it still supports the merger announced last September, even as it alleges that ETE has breached the agreement through a pattern of delay and obstruction designed to circumvent its contractual commitments.
- ETE CEO Kelcy Warren said last week that his company cannot close the deal without substantial changes.
- Now read Is the Energy Transfer-Williams deal dead? Short interest says no
Wed, May 11, 7:27 PM
- Bernstein analysts initiate several midstream and pipeline MLPs, estimating that less than 7% of MLPs $70B in service revenues are at risk in a $40/bbl oil environment; oil production volumes will likely fall this year, but midstream pipeline plays will mostly be unaffected, the firm says.
- On the other hand, the firm sees less long-term upside to MLPs than many investors expect, as after next year existing and in-progress gas and crude infrastructure will be sufficient to handle forward production through 2025.
- Bernstein prefers Enterprise Products Partners (NYSE:EPD) because of its significant committed market-based projects, and Williams Partners (NYSE:WPZ) and Williams Cos. (NYSE:WMB) on the belief they have been unfairly punished due to expected dividend cuts; the firm rates EPD, WPZ and WMB at Outperform.
- Bernstein ranks Kinder Morgan (NYSE:KMI), Spectra Energy (NYSE:SE), Spectra Energy Partners (NYSE:SEP), Energy Transfer Partners (NYSE:ETP), Energy Transfer Equity (NYSE:ETE), Cheniere Energy (NYSEMKT:LNG) and Cheniere Energy Partners (NYSEMKT:CQP) at Market Perform; the only name rated Underperform is Sunoco Logistics (NYSE:SXL).
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Thu, May 5, 12:38 PM
- "We can't close this deal," Energy Transfer Equity (ETE +6.4%) CEO Kelcy Warren says of the takeover of Williams Cos. (WMB +3.9%) without the tax opinion that would deem the transaction an exchange that frees shareholders from tax liabilities.
- "Absent a substantial restructuring of this transaction, which Energy Transfer has been very willing and actually desiring to do, absent that, we don't have a deal," Warren said in today's earnings conference call, adding that ETE would be open to a deal that would remove the cash portion of its cash-and-stock bid for WMB.
- ETE general counsel Thomas Mason said on the call that adviser Latham & Watkins had looked for a solution to the tax problem but had failed to find one, and legal advisers reached the same conclusion; he said either party could walk away from the deal after a June 28 deadline, but that ETE is "not focused" on that right now.
- Also: ETP +8.9%, WPZ +3.4%.
- Now read Energy Transfer nixes Williams proposals to resolve tax issues
Wed, May 4, 6:57 PM
- Energy Transfer Equity (NYSE:ETE) says it does not agree with two possible solutions proposed by Williams Cos. (NYSE:WMB) in the hope of resolving tax issues that threaten their merger, according to a new SEC filing today.
- WMB thinks the new structures would allow ETE's lawyers to issue a tax opinion necessary for the merger agreement to close, but ETE says it does not believe the deal requires it to restructure the deal, and said the suggested changes still would create substantial risks of material taxation if the deal is completed.
- WMB is suing ETE in Delaware to stop an offering of preferred shares to its top shareholders, and has sued ETE CEO Kelcy Warren in Texas over the same offering; ETE said today it has countersued WMB in Delaware, alleging the company breached its obligations under the merger agreement by blocking the proposed public offering and by suing Warren.
- WMB shares fell 0.7% today, at one point sinking as much as 45% below the value of ETE's original cash-and-stock offer last September, reflecting widespread doubt among investors that the deal will be completed; ETE gained 4% today.
- Now read Energy Transfer, Williams amend deal; gives SEC more time for review
Wed, May 4, 5:04 PM
Tue, May 3, 5:35 PM
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Tue, May 3, 9:05 AM
- Energy Transfer Equity (NYSE:ETE) and Williams Cos. (NYSE:WMB) amend the terms of their merger deal to reduce the number of days specified for completing some administrative requirements, confirming an earlier report.
- According to an SEC filing, the companies agreed to shorten the period between when the proxy and form of election are sent and when the deal can close; the form of election allows WMB shareholders to choose whether they want cash or stock for their shares.
- The new timeline will give the companies time to renegotiate terms ahead of June 28, the deadline for the deal to close.
- Now read Time to dump Williams Companies
Mon, May 2, 10:50 PM
- Energy Transfer Equity (NYSE:ETE) is taking steps that may enable it to renegotiate its $20B acquisition deal for Williams Cos. (NYSE:WMB), Reuters reports.
- The companies are seeking to reduce the number of days specified for completing some of the deal's administrative requirements, which would give them time to engage in renegotiation of terms ahead of a June 28 deadline for the deal to close, according to the report.
Tue, Apr. 19, 12:34 PM
- Research firm CreditSights thinks now is "a great entry point" to buy Williams Partners (WPZ +4.9%) bonds even as the merger plans of parent company Williams Cos. (WMB +4.2%) and Energy Transfer Equity (ETE +5.4%) appear to become more remote.
- CreditSights upgrades WPZ bonds to Outperform from Market Perform, liking the bonds whether or not the merger closes and believing that WMB has the balance sheet and the incentive to keep its MLP subsidiary investment grade; if the merger does go through, the firm says the just-filed S4 on the deal gives new disclosure that ETE will eliminate its dividend entirely in order to support investment grade ratings at Energy Transfer Partners (ETP +2.8%) and WPZ.
- The firm believes ETE is hoping WMB shareholders will vote against the merger, and that recent negative disclosures are part of that effort.
- Now read Williams is worth owning even if the Energy Transfer Equity merger fails
Mon, Apr. 18, 3:12 PM
- Energy Transfer Equity (ETE +9.5%) discloses that its lawyers may not be able to deliver a tax opinion for its takeover of rival Williams Cos. (WMB -4.6%).
- ETE and WMB need a “721 Opinion” to complete their merger, and the law firm has told ETE that it be unable to deliver the opinion if the deal’s closing were to occur at the present date, according to an SEC filing.
- ETE says in the filing that WMB disagrees with its position on the tax issue, and that the two companies are in talks on the impact this could have on the closing of the deal.
- Related tickers: ETP +4.3%, WPZ -2.9%.
- Now read Energy Transfer Equity's merger with Williams is crumbling
Fri, Apr. 15, 8:58 AM
- Williams Cos. (NYSE:WMB) says the Delaware Chancery Court will expedite its litigation against Energy Transfer Equity (NYSE:ETE) over private shares issued to help finance the pending merger of the two pipeline companies.
- WMB filed the lawsuit last week, as well as a separate suit against ETE chief Kelcy Warren, accusing its planned acquirer and the CEO of violating the merger agreement with a private offering of debt.
- WMB's board also reiterates its support for the merger, which is expected to close in Q2.
- Now read Williams is worth owning even if the Energy Transfer Equity merger fails
Thu, Apr. 7, 6:56 PM
- Williams Cos. (NYSE:WMB) and Energy Transfer Equity (NYSE:ETE) have enjoyed strong gains since WMB announced yesterday that it was suing ETE over private shares that were issued to help finance their $32.5B merger, as investors bet that the deal is falling apart.
- "Market participants look at the move as a potential step toward blowing up the deal, and the securities of all the involved entities have benefited from that possibility," Reorg Research writes, adding that ETE may have violated one of the terms of their agreement, and that If WMB kills the merger because of ETE’s breach, ETE may have to reimburse WMB's fees and expenses up to $100M.
- “I’ve never seen anything like this - a board that hates what the management team is doing enough to sue, but still wants to do the deal,” says Hinds Howard, an MLP portfolio manager at CBRE Clarion Securities.
- In the past two trading days: ETE +9.6%, WPZ +31.7%, WMB +6%, ETP +4.4%.
- Now read Energy Transfer Equity paints a dire picture of the Williams merger
Wed, Apr. 6, 9:59 AM
- Williams Companies (WMB +0.5%) says it is suing Energy Transfer Equity (ETE +3.7%) and Chairman Kelcy Warren to block a private preferred share offering disclosed last month, saying it was a breach of their merger agreement and provides certain ETE investors preferential treatment on its distributions.
- ETE issued convertible units to certain investors, including Warren, last month to raise funds to help cover the $6B it will owe WMB investors when the deal closes.
- WMB says it has commenced litigation to protect the interests of its stockholders while remaining committed to working with ETE to ensure the financial strength of the combined company.
- ETP +3.3%, WPZ +2.3%.
- Now read Energy Transfer Partners cut to Hold at Stifel, citing "looming challenges"
Mon, Apr. 4, 10:49 AM
- Energy Transfer Partners (ETP -2.6%) is downgraded to Hold from Buy at Stifel, which says ETP's valuation seems high given the looming challenges associated with the merger of Energy Transfer Equity (ETE -2%) and Williams (WMB, WPZ).
- Stifel also continues to assume ETP will require $500M of equity capital to complete its 2016 budget, which it believes is another reason to be cautious.
- Current multiples do not appear excessive, given ETP's diversified largely fee-based assets, but the firm expects near-term challenges that may limit further expansion.
- Stifel also believes ETP's distribution is secure and the 13.4% yield is attractive, but near-term challenges may limit price appreciation.
- Now read Energy Transfer Partners can sail through this storm without cutting dividends
Thu, Mar. 24, 11:16 AM
- Energy Transfer Equity (ETE -4.9%) drastically cuts expectations for its takeover of Williams Cos. (WMB -7.2%), due in part to lower oil prices and the increased cost of capital.
- ETE now says it expects the base case for EBITDA from commercial synergies from the deal to total ~$170M/year by 2020, compared with previous forecasts of more than $2B; EBITDA from commercial synergies could total ~$590M/year if oil prices recovery to the $53.97-$64.26/bbl range in 2020, but that still would be far below previous forecasts.
- ETE also says it plans to grant awards under a long-term incentive plan that will dilute WMB stockholders' position in Energy Transfer Corp., the vehicle ETE is launching to buy WMB; the company also says it likely would need to significantly reduce its presence in WMB's home state of Oklahoma.
- Also: ETP -1.3%, WPZ -4.4%.
The Williams Cos., Inc. operates as an integrated natural gas company that explores, produces, transports, sells and processes natural gas and petroleum products. It operates through three segments: Williams Partners, Williams NGL & Petchem Services and Others. The Williams Partners segment... More
Sector: Basic Materials
Industry: Oil & Gas Pipelines
Country: United States
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