Addressing The Williams Chesapeake Exposure
Williams Companies: Playing The Gas Infrastructure Super-Cycle
Stanislav Ermilov • 26 Comments
Stanislav Ermilov • 26 Comments
Williams Companies Offers Growth, Upside, And Risk
Stephen Simpson, CFA • 11 Comments
Stephen Simpson, CFA • 11 Comments
Thu, Jul. 14, 2:52 PM
- Williams Cos. (WMB +5.6%) moves sharply higher following a Reuters report that it has received at least seven bids for its Canada unit, in a potential sale that could fetch $1B-$2B.
- Interest has come from pipeline companies Enbridge (ENB -0.4%), Pembina (PBA +0.5%), Keyera (OTC:KEYUF) and Inter Pipeline (OTCPK:IPPLF), as well as three Canadian pension plans, and an unspecified number of U.S. companies, according to the report.
- The sale process reportedly is at an advanced stage, and a deal could result by the end of the month; interest is said to be strong, highlighting demand for midstream assets that offer a steady cash flow despite volatile oil prices.
- Also: WPZ +3.3%, EEP +0.1%.
Wed, Jun. 29, 10:39 AM
- Williams Cos. (WMB -1.2%) says it will seek monetary damages from Energy Transfer Equity (ETE +2.5%) for breaching their merger deal, saying it does not believe ETE had a right to terminate the agreement.
- Overnight, ETE officially terminated the merger, a move that was expected after a Delaware judge ruled on Friday that it could back out since its lawyers could not deliver a necessary opinion on the deal’s tax treatment.
- WMB has said the deal’s collapse could cost $4B-$10B in lost value for its shareholders.
Wed, Jun. 29, 3:54 AM
- Energy Transfer Equity (NYSE:ETE) has terminated its merger agreement with Williams Cos. (NYSE:WMB) after a court ruled that it can walk away from the deal since it was unable to deliver a required tax opinion by June 28.
- Williams remains committed to completing the merger and will "enforce its rights" under the terms of its agreement, the company said in a statement. The deal had been valued at nearly $33B when it was signed last year.
Mon, Jun. 27, 4:48 PM
- Williams Cos. (NYSE:WMB) says it will continue its legal fight to close the merger with Energy Transfer Equity (NYSE:ETE) after shareholders voted to approve the deal.
- WMB says more than 80% of votes cast at today's shareholder meeting voted in favor of the merger, representing more than 63% of all WMB outstanding shares.
- WMB says it filed papers launching an appeal of Friday's court ruling in favor of ETE, believing that ETE breached their merger agreement and does not have the right to terminate it.
- WMB closed -6.1%, ETE -1.6% in today's trade.
Mon, Jun. 27, 8:32 AM
- Williams Cos. (NYSE:WMB) -6.6% premarket after Friday's court ruling likely ends the merger with Energy Transfer Equity (NYSE:ETE).
- Ahead of a shareholder meeting today, WMB continues to ask its shareholders to vote in favor of the deal, and WSJ reports it is considering appealing the ruling, and could sue ETE for damages if it loses that appeal.
- Assuming the merger does not work out, WMB must decide what sort of company it wants to be; former CEO Keith Bailey believes the company should go back to basics - “steady growth over time.”
- WMB already has telegraphed one move: Earlier this month, it said it may have to cut its $0.64 quarterly dividend by a “material” amount, perhaps by as much as 60%, says Evercore ISI's Timm Schneider.
- But WMB still has plenty going for it, with the assets - a vast network of pipes in the Marcellus shale formation and the 10k-mile Transco pipeline - that made it so appealing to ETE in the first place, and it could revisit a plan to buy its Williams Partners (NYSE:WPZ) MLP or entertain offers from another buyer.
- ETE +7.7% premarket.
Fri, Jun. 24, 4:57 PM
- Energy Transfer Equity (NYSE:ETE) +7.3% AH after the judge rules in its favor in the merger dispute with Williams Cos. (WMB -6.8%).
- The judge says ETE's lawyers were not deliberately sabotaging the merger and that the company's fears of an unexpected tax bill were genuine.
- "Motive to avoid a deal does not demonstrate lack of a contractual right to do so," judge Sam Glasscock wrote. “A desperate man can be an honest winner of the lottery."
- Analysts believed the judge flagged his decision when he said a key issue in the dispute was whether the lawyers hired to assess the tax implications of the merger acted in good faith when they determined it was damaged by complications (I, II).
Wed, Jun. 22, 2:23 PM
- Energy Transfer Equity (ETE +2.6%) extends yesterday's gains as Wall Street bets the judge in the merger trial will rule in its favor and against Williams Cos. (WMB -2.7%), and allow it to walk away without paying a breakup fee.
- Bloomberg reports that the spread traded by those speculating on whether the deal will fall apart reached a record high today after the judge said yesterday that a key issue is whether the lawyers hired to assess the tax implications of the deal acted in “good faith” when they concluded it was marred by complications.
- "We believe ETE won,” Evercore analyst Timm Schneider says. “We do not believe there was enough evidence that would lead the judge to rule [ETE's lawyers] acted in ‘bad faith.”’
- Bloomberg's Brandon Barnes says the court could find a way to credit both sides’ arguments with an opinion that gives both something instead of declaring either party an outright winner.
Tue, Jun. 21, 7:50 PM
- Energy Transfer Equity (NYSE:ETE) surged 17% in today's trade while Williams Cos. (NYSE:WMB) slipped 3% after the judge in the merger trial said the key issue in the case is the good faith of the lawyers who concluded that the deal is damaged by tax complications.
- The judge’s comments may be positive for ETE, according to Bloomberg legal analyst Brandon Barnes, since “proving a negative on the good faith issue is difficult. It could be a key indication that there may be light at the end of the tunnel for ETE where they could walk away from this deal without paying anything or being forced to actually close.”
- ETE has said the merger cannot be completed because it has not been able to get an opinion that finds the deal’s structure frees shareholders from tax liabilities, while WMB contends ETE is using the tax issue as a pretext to scuttle the deal.
- If ETE tax counsel Latham & Watkins "was acting in good faith and they can no longer deliver the opinion letter, you can’t close the deal,” says Tudor Pickering Holt analyst Brandon Blossman. “There is nothing else to talk about, the deal breaks and everyone goes home."
- The judge said today that he would hand down a ruling on Friday, ahead of a vote by WMB’s shareholders next Monday.
Mon, Jun. 20, 3:28 PM
- Energy Transfer Equity (ETE -6.2%) CEO Kelcy Warren feared that pushing ahead with a merger with Williams Cos. (WMB +0.2%) after oil prices plunged would cause a credit ratings downgrade and cause an "implosion," former CFO Jamie Welch said today during a Delaware Chancery Court trial over the faltering merger.
- Welch also said Warren was “uninterested in restructuring” the deal, brushing aside offers from WMB to revise the merger to address questions about whether the IRS would view the combination as properly freeing investors' tax liabilities.
- On the equity offering that WMB says was designed in part to unfairly increase Warren’s payout on units he held in some ETE’s partnerships, Welch said he opposed setting up the offering that way, adding that Warren did not receive a salary or bonus and relied on the payments.
- The judge is hearing evidence to determine whether ETE or WMB violated the merger agreement in ways that make it impossible to close the deal, once valued at $32B.
Mon, Jun. 20, 2:27 AM
- After months of squabbling, Williams Cos. (NYSE:WMB) and Energy Transfer (NYSE:ETE) will face off today in a Delaware courtroom, where top lawyers will go toe-to-toe analyzing the fine print of their 400-page merger agreement.
- While both sides accuse each other of breaching the contract, Energy Transfer hopes the judge will find violations that are serious enough to kill the deal.
Fri, Jun. 17, 12:46 PM
- Williams Cos. (WMB +1.6%) files a presentation that says the potential financial benefit expected from its pending merger with Energy Transfer Equity (ETE +0.1%) could be 94% lower than initial projections, the latest evidence that the deal is on shaky ground.
- The companies now estimate merger-related synergies of $126M/year by 2020, far lower than $2B-plus in annual synergies initially projected by ETE when the takeover deal was struck in September; even if market conditions return to July 2015 levels, merger-related synergies would equal only $543M.
- The new estimate is a result of the "joint integration planning process in early 2016” by both companies, according to the presentation.
- Also, WMB's board declares a $0.10/share special dividend to stockholders upon closing of the deal.
Wed, Jun. 15, 12:42 PM
- Williams Cos. (WMB +5.2%) says proxy advisory firm ISS is recommending that shareholders vote in favor of Energy Transfer Equity's (ETE +1.2%) takeover bid.
- Among the factors cited by ISS are the significant cash component of the bid, the more diversified customer base of the combined company, upside exposure to significant growth opportunities such as Lake Charles LNG, and the opportunity to own nearly half the equity in a combined company anticipated to have much stronger free cash flow than WMB on a stand-alone basis.
- In its own letter urging support for the deal, WMB says the merger would lead to "significant synergies" and reiterates that it could cut the dividend if the pending deal is not completed.
- WMB shareholders are set to vote on the troubled merger deal - valued at ~$33B when it was announced - on June 27.
Thu, Jun. 9, 3:20 PM
- Williams Cos. (WMB +0.7%) is higher and Energy Transfer Equity (ETE -3.3%) is sharply lower after the Federal Trade Commission approves their merger with conditions.
- The FTC says the companies must agree to sell WMB's 50% stake in the Gulfstream Natural Gas System, an interstate pipeline that serves Florida, particularly the state's electric power companies.
- The merger, originally valued at ~$38B, may not close in H1 as scheduled because the agreement with the FTC is subject to a 30-day public comment period, which will end on July 11.
Wed, Jun. 8, 10:47 AM
- While committing to pay a $0.64/share dividend for the current quarter, Williams Cos. (WMB +0.1%) warns it would cut its dividend in the next quarter if a deal to sell itself to Energy Transfer Equity (ETE +2.2%) falls through.
- WMB, which reiterates its commitment to closing the ETE deal, says it has not determined the amount of any dividend cut but that it "could be material."
- WMB shareholders are scheduled to vote June 27 on the deal, which ETE has been trying to restructure or exit altogether.
Tue, Jun. 7, 3:22 PM
- The mayor of Tulsa, Okla., home to the headquarters of Williams Cos. (WMB +1.8%), says Energy Transfer Equity's (ETE +0.9%) proposed takeover has "no business or industrial logic" and may be “tragic” for the city and WMB’s shareholders.
- "My city will bear a very substantial cost for a transaction that destroys value for the shareholders it is supposed to benefit," Bartlett says in his letter.
- Mayor Bartlett's plea comes less than a week after three former WMB CEOs raised similar concerns in their own letter to stockholders.
- A vote against the deal would preserve WMB's independence and provides “the opportunity for substantial value accretion once the overhang of this transaction is gone," the CEOs said.
Fri, May 27, 6:41 PM
- Williams Cos. (NYSE:WMB) tells Energy Transfer Equity (NYSE:ETE) it is open to considering a new offer that would amend the terms of their proposed merger in an effort to end the stalemate between the two companies, Reuters reports.
- WMB would consider a proposal that would replace the $6B cash portion of the ~$20B deal with shares in the acquisition vehicle that ETE will set up for the deal, according to the report.
- WMB's latest tactical move aims to test ETE's statement earlier this month that it would consider restructuring the deal.
- Time is running out for renegotiations: The two sides are set to face off in Delaware's chancery court on June 20 over tax issues and claims by both companies that the other has broken their contact.
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 four segments: Williams Partners, Williams NGL & Petchem Services, Access Midstream Partners and Others. The... More
Sector: Basic Materials
Industry: Oil & Gas Pipelines
Country: United States
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