Wed, Sep. 30, 8:54 PM
- A new report from corporate bond research firm Gimme Credit points to one more reason investors may have reacted so negatively to Energy Transfer Equity's (NYSE:ETE) takeover of Williams Cos. (NYSE:WMB): The Energy Transfer family is getting too big and too complex.
- If approved by shareholders, ETE would form a new partnership, Energy Transfer Corp., which will be treated as a C-corp and merge with WMB; at closing next year, ETE and ETC would be “holdcos" for four publicly-traded MLPs - WPZ, ETP, SXL and SUN.
- ETE says it is committed to the multi-entity structure "despite the concern that ETE entities (combined) are trading at a discount to a simplified" Kinder Morgan (NYSE:KMI), Gimme Credit says.
- ETE, WMB and WPZ all bounced sharply higher in today's trading, but each still has dropped more than 10% since the announcement.
Wed, Sep. 30, 3:56 PM
- Veresen (OTC:FCGYF) is awarded a final environmental impact statement by U.S. regulators, a key hurdle on the way to winning approval to build the $7B Jordan Cove liquefied natural gas export terminal in Oregon.
- The company says the FERC issued the permit for its 100%-owned project as well as the Pacific Connector Gas Pipeline it owns in partnership with a Williams Cos. (NYSE:WMB) subsidiary.
- The planned export terminal at Coos Bay, Ore., would have the capacity to receive 1.03B cf/day of gas and produce up to 6.8M metric tons/year of LNG; a 390 km natural gas pipeline from Malin, Ore., to the terminal would deliver gas originating in Canada and the U.S. Rocky Mountain region.
- Veresen says it expects to obtain a FERC notice to proceed in mid-2016, allowing it to make a final investment decision.
Mon, Sep. 28, 7:45 PM
- "It’s clearly a disappointing deal” for investors, says Jay Hatfield, portfolio manager of the InfraCap MLP exchange-traded fund, of Energy Transfer Equity's (ETE, ETP) takeover of Williams Cos. (WMB, WPZ), but bad timing and evidence of panic selling among MLPs exacerbated today's selloff.
- But Hatfield is not against the deal or the MLP space, seeing eventual upside for ETE but perhaps not be until 2016, when deal closes and energy prices have stabilized; "It is a great idea for 2016, but there may be better opportunities before then," Hatfield says.
- One reason for the extreme nature of today's selloff could be that there is little liquidity and few buyers in the energy market right now, and particularly the midstream energy market where ETE and WMB operate, says Tudor Pickering's Brandon Blossman.
- ETE shareholders also may be concerned the company is converting to a corporate structure as part of the deal, which plays into growing talk that the MLP business model may not survive the current difficulties.
- "We now believe the financial operating structure of the MLP may not survive in its current form, even as we say that most businesses using the MLP model are good ones,” writes Brian Nelson, president of Valuentum Securities; he thinks the stock market eventually will demand that MLPs pay their distributions and dividends out of earnings and traditional free cash flow, causing the declines in their unit prices to continue.
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Mon, Sep. 28, 11:39 AM
- Investors are balking at Energy Transfer Equity's (ETE -8.9%) just-announced merger with Williams Cos. (WMB -8.6%), as shares in the two oil and gas pipeline companies sell off sharply.
- WMB appears not to have needed to do much to sweeten its offer: "At first glance, it seems as if the bid matches ETE’s original offer made in June,” Raymond James analysts say - since both companies’ shares have fallen since the potential deal first became public, the headline deal number is now much lower than the $48B value announced in June.
- While plunging oil and natural gas prices have not hit pipeline operators as hard as other energy companies, analysts say the group is facing pressure to merge; prices also have fallen for fuels such as ethane and propane, which has hurt companies like WMB, which processes natural gas.
- Despite the immediate negative reaction, ETE claims the merger will enable it to capture $2.4B or more in commercial and cost-saving synergies over the next few years.
- Kinder Morgan (KMI -3.8%) and Spectra Energy (SE -3.4%) were among the other companies reportedly interested in acquiring WMB.
- Also: WPZ -7.7%, ETP -6.1%.
Mon, Sep. 28, 7:23 AM
- Energy Transfer Equity (NYSE:ETE) agrees to acquire Williams Cos. (NYSE:WMB) in a deal valued at $37.7B, implying a price of $43.50/share, to create the third largest energy franchise in North America and one of the five largest global energy companies.
- ETE and WMB say the transaction is immediately accretive to cash flow and distributions for both companies, and anticipate commercial synergies exceeding $2B of incremental EBITDA by 2020, with up to $400M of additional cost savings expected from the implementation of ETE's shared service model.
- WMB is terminating its previous plan to acquire Williams Partners (NYSE:WPZ); WMB will pay WPZ a $428M termination fee.
Wed, Sep. 23, 3:15 PM
- Williams Cos. (WMB -3.8%) board is preparing to meet as soon as this week to consider a sale to Energy Transfer Equity (ETE -3.7%) in response to a revised offer, Reuters reports.
- ETE has offered to tweak its all-stock offer for WMB, which is currently worth ~$34B, and pay for ~15% of the deal with cash, according to the report.
- The bid was worth ~$48B in June when WMB rejected an acquisition proposal from ETE, and share prices have since dropped along with oil prices.
- Also: WPZ -4.4%, ETP -2.5%.
Wed, Sep. 16, 4:33 PM
- Energy Transfer Equity (ETE, ETP) is close to winning its takeover fight for rival pipeline operator Williams Cos. (WMB, WPZ), and a deal could be announced in the next week and a half, Bloomberg reports.
- A deal would end a battle that went public in June, when WMB publicly rejected ETE’s unsolicited $53B bid and hired banks to explore a sale; it is not known if ETE has changed the terms of its initial proposal.
Fri, Sep. 11, 7:30 PM
Fri, Sep. 11, 6:24 PM
- Spectra Energy (NYSE:SE) has exited the auction process for Williams Cos. (WMB, WPZ), increasing the possibility that Energy Transfer Equity (ETE, ETP) could succeed in buying the company, Reuters reports.
- ETE and WMB are said to be negotiating and trying to agree over the share portion of the offer, with ETE offering new shares that have never traded in the public market and WMB viewing the valuation for those shares as untested.
- ETE has hinted that it could launch a hostile takeover if discussions fall through.
Thu, Sep. 10, 12:57 PM
- Williams Cos. (WMB -4.2%) is downgraded to Market Perform from Outperform at Wells Fargo, citing “a less attractive risk-reward balance when considering the potential outcomes” of the review process on which bid to accept among several potential acquirers.
- Wells thinks Energy Transfer Equity (ETE -1.1%) will win out but says the deteriorating macro environment makes analysts less confident; a decision to reject ETE and go solo, folding in its Williams Partners (WPZ -0.2%) MLP, would mean significant downside risk to the share price, the firm says.
- Wells’ best advice for investors who want exposure to Williams is to buy WPZ, which the firm believes has upside either way.
Tue, Sep. 8, 3:49 PM
- Williams Cos. (WMB +1.4%) renegotiated contracts with Chesapeake Energy (CHK +5.3%) are supposed to be positive for WMB's EBITDA, but Amey Stone at Barron's says several MLP contracts likely will be rewritten in the coming months resulting in tougher terms for the midstream MLPs that provide the storage and transportation.
- Janney analyst Nathan Judge argues that such negotiations are healthy for the recovery of MLPs, saying the deals often will result in positive outcomes for the MLP and may be supportive for a recovery in the group as fears diminish.
- The MLP usually has the upper hand in contract renegotiations, Judge believes, as customers that wish to renegotiate must make it economically attractive to the MLP to make changes; also, if the customer expects to grow, it will need to incentivize the MLP to invest, which was clear from the WMB-CHK deal.
Tue, Sep. 8, 12:21 PM
- Chesapeake Energy (CHK +6.7%) surges higher after announcing a deal with Williams Cos. (WMB +1.4%) that will decrease its natural gas transportation costs in exchange for higher volume.
- The deal should help improve CHK's 2016 guidance by diminishing the issues of high transportation costs and minimum volume commitments that have weighed on the shares for nearly a year, Wunderlich's Jason Wangler says.
- The firm says it remains bullish on CHK’s assets and believes management "continues to navigate tough internal and external factors quite impressively."
Mon, Aug. 17, 8:11 AM
- Spectra Energy (NYSE:SE) is bidding for the whole of Williams Cos. (NYSE:WMB), despite its market cap being about half of the latter, Reuters reports.
- Kinder Morgan (NYSE:KMI) is also interested in the company, but would face potential antitrust issues if it proceeded with a bid.
- Williams put itself up for sale in June after rejecting a $53.1B all-stock takeover bid (including debt) from Energy Transfer Equity (NYSE:ETE).
- WMB +1.5% premarket
Wed, Aug. 5, 2:45 PM
- Energy Transfer Equity (ETE -2.9%) has progressed to the second round of bidding for Williams Cos. (WMB -1.7%), a key milestone in its efforts to clinch a friendly takeover, Reuters reports.
- WMB decided to put itself on the auction block after it rejected an acquisition proposal from ETE in June worth ~$53B at the time including the assumption of debt, aimed at disrupting WMB's plans to acquire its pipeline subsidiary Williams Partners (WPZ -3.6%).
- WMB reportedly has attracted other bidders, although it is not yet clear which other companies made it through to the second round; Kinder Morgan (KMI -3.5%) and Spectra Energy (SE +0.4%) reportedly have expressed interest in WMB, but KMI could face significant antitrust hurdles because of its size.
Wed, Jul. 29, 6:47 PM
- Williams Cos. (NYSE:WMB) +2.6% AH despite reporting Q2 earnings that missed analyst estimates and included reduced full-year guidance, citing a decline in commodity prices.
- But WMB also affirms its 2015 dividend guidance and dividend growth estimate through 2020, forecasting $0.64/share in Q3 2015 ($2.56 annualized) and $2.85 in 2016, with 10%-15% annual dividend growth through 2020.
- WMB lowers its FY 2015 EBITDA guidance by 6% to $4.23B, citing lower commodity prices and the extended ramp-up of its Geismar plant.
- WMB also says it would not hold a shareholder vote on its proposed $13.8B consolidation with Williams Partners (NYSE:WPZ) until after the company finishes evaluating a potential sale.
- WPZ reports distributable cash flow of $701M compared with $504M in DCF attributable to partnership operations in the year-ago quarter, which leaves WPZ just short of covering the $723M in cash it paid out to investors.
Wed, Jul. 29, 5:24 PM
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