Addressing The Williams Chesapeake Exposure
Williams Companies: Playing The Gas Infrastructure Super-Cycle
Stanislav Ermilov • 26 Comments
Stanislav Ermilov • 26 Comments
Thu, Aug. 18, 1:48 PM
- Williams Cos. (NYSE:WMB) has jumped (as much as 11.6% minutes ago) on a report that Enterprise Product Partners (NYSE:EPD) approached it this summer with an acquisition.
- Williams shares have fallen back to just a 6.6% gain. EPD spiked briefly and has now headed for negative territory, -0.2%.
- Williams didn't make an official response, Reuters says, since its recent gains meant Enterprise's offer carried little to no premium.
- Despite that, Enterprise remains interested in a deal that would create an $80B giant, the Financial Times reports.
- A planned merger of Williams with Energy Transfer Equity fell apart in June as ETE walked away after a favorable court ruling.
Tue, Aug. 2, 9:17 AM
- Gainers: SINO +64%. ESEA +28%. ADXS +25%. TRXC +25%. TOPS +17%. CTRV +17%. CGNX +15%. CBIO +12%. AMKR +12%. SODA +11%. PSTI +10%. VGZ +8%. AVP +8%. KOOL +8%. MNK +7%. GKOS +7%. HZNP +6%. OGEN +6%. OCN +6%. WMB +6%. STX 5%. ROSG 6%. NYRT 5%. INO 5%.
- Losers: IDTI -13%. TXRH -10%. ANGO -9%. GLOP -8%. ALLT -6%.
Mon, Aug. 1, 5:40 PM
- Williams Cos. (WMB -6%) has picked up 4.1% after hours as its Q2 earnings report brings confirmation of a dividend cut to be used to invest in pipeline unit Williams Partners (WPZ, itself up 2.1% after hours).
- The company cut its quarterly cash dividend to $0.20/share from its previous $0.64, starting with Q3, saying it expects to resume increases in 2018.
- Williams swung to a net loss (unaudited) of $405M after taking a $747M pretax impairment charge tied to Canadian operations held for sale.
- Williams will reinvest about $1.7B into Williams Partners through 2017, funded by a distribution reinvestment program. That begins with $500M in investment in 2016 ($250M in Q3 via private purchase and the balance in Q4 via the DRIP).
- Another $1.2B will be reinvested in WPZ in 2017 via the DRIP.
- Press Release
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%.
Fri, Jul. 1, 2:00 PM
Fri, Jul. 1, 11:34 AM
- Trading is resumed after a morning-long halt, as Williams Cos. (WMB -4.8%) says Chairman Frank MacInnis and five other board members have stepped down, confirming an earlier report.
- The board appoints Kathleen Cooper, a current director and audit committee member, as the new Chairman, and retains Alan Armstrong as CEO, saying WMB "has become a best-in-class operator" under his watch.
- The resignations chop the company's 13-member board to seven, and the board says it will evaluate the appropriate size and composition going forward.
Wed, Jun. 29, 4:49 PM
- Stone Energy (NYSE:SGY) +6.4% AH after announcing the termination of its existing long-term deepwater rig contract with Ensco (NYSE:ESV) for $20M; the ENSCO 8503 deepwater rig contract was at a dayrate of $341K and was scheduled to expire in August 2017.
- Additionally, SGY says it entered into an interim gas gathering and processing agreement with Williams Cos. (NYSE:WMB) at the Mary field in Appalachia, which SGY says provides near-term relief by permitting it to resume production at the Mary field.
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.
Mon, Jun. 27, 9:13 AM
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, 5:36 PM
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.
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.
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.
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