Addressing The Williams Chesapeake Exposure
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%.
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.
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
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
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"
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%.
Mon, Mar. 14, 10:58 AM
- Williams Cos. (WMB -0.9%) says it remains committed to closing its merger with Energy Transfer Equity (ETE +2.4%) and expects the deal will be completed in H1 of this year.
- According to an SEC filing, WMB CEO Alan Armstrong, responding to a question in a town hall meeting, said the "shortest case scenario" for a required vote of WMB shareholders on the deal could be around April 20.
- Armstrong also said that on "a standalone basis, we'd be healthy and thriving and continue to do the very best in the circumstances."
- Regarding the possibility of reopening its deal to acquire affiliate Williams Partners (WPZ -1.8%), Armstrong said it is "very hard to say exactly how that would roll out at this point, just given how unsettled the capital markets are."
- Earlier: Reuters: Energy Transfer has held talks to sell Sunoco (Mar. 11)
Thu, Mar. 10, 2:39 PM
- Williams Cos. (WMB -9.3%) shares have dropped as much as 17% today thanks to Energy Transfer Equity's (ETE -6.8%) dilutive effort to raise cash to help fund its $14B-plus takeover of the company.
- ETE disclosed the private offering in a filing after yesterday's close and said it had intended to offer the units to all of its shareholders, but WMB would not give its consent.
- WMB says it has offered to work with ETE to find a solution to financing a deal that is more beneficial for both companies’ investors, and remains open to working collaboratively to improve the financial profile of both companies.
- The spread between WMB's share price and the per share value of ETE's bid for WMB also widened significantly to ~19%, suggesting investor skepticism that the companies would be able to close the deal.
- WPZ -2.4%, ETP -0.1%.
Fri, Feb. 26, 10:58 AM
- CNBC's David Faber reports that Energy Transfer Equity (ETE +2.5%) likely will take the Williams (WMB +1.2%) merger proposal to a shareholder vote, and says his sources indicate there has not been any conversation or contemplation of paying $2B to get out of deal.
- Faber notes that the merger contract is so tight that it will be very difficult for ETE to get out.
- A NY Times article yesterday said ETE had considered but never presented an offer of a one-time payment of more than $2B to WMB to walk away.
- Faber also says the market is focused on whether ETE will try to access the capital markets to bolster its ability to finance activities, based on remarks from yesterday's Energy Transfer Partners (ETP +2.1%) earnings conference call.
- Also: WPZ +4.3%.
Thu, Feb. 25, 2:55 PM
- Williams Cos. (WMB -5.4%) plummets 10% before trading is halted, then bounces slightly, following a NY Times report that Energy Transfer Equity (ETE +0.7%) is considering pulling out of their planned merger.
- ETE execs are "suffering from a giant case of buyer’s remorse," and are "frantically" searching for a way to pull out of the deal, according to the report, which says ETE considered but never presented an offer of a one-time payment more than $2B to WMB to walk away.
- Shares of both companies have plunged more than 60% and shed a combined $37B in market value in the five months since the takeover was closed, and the value of the deal lost another ~$1B today after ETE announced disappointing Q4 earnings and the stock dropped to its lowest level since 2009.
- Also: ETP -10.1%, WPZ -6.9%.
Mon, Feb. 22, 6:35 PM
- Some analysts believe the merger of Williams Cos. (WMB, WPZ) and Energy Transfer Equity (ETE, ETP) is inching closer to fruition, after WMB said last week that it remains committed to the much-maligned deal.
- Raymond James analyst Darren Horowitz believes the highest probability outcome remains that WMB and ETE continue with the previously agreed-upon merger terms, and that it is in management’s best interest to provide as much deal-related transparency as legally possible.
- Rob Thummel, portfolio manager at Tortoise Capital, thinks more encouragement came from some reassurance on WMB's earnings conference call that the company is not overly exposed to the risk that Chesapeake Energy (NYSE:CHK), which provides about 18% of WMB's cash flow, could go bankrupt and stop making payments.
- However, CTFN reports that January's $1B private placement of debt by WMB subsidiary Transcontinental Gas Pipe Line has led an investor to question the "limitation of guarantees” covenant as it may relate to the merger.
Wed, Jan. 27, 3:28 PM
- Energy Transfer Equity (ETE -9.6%) plans to move forward with its $32.9B takeover of Williams Cos. (WMB -5.8%) without altering the terms of the deal, Bloomberg reports, despite speculation that the deal may need to be reworked.
- However, ETE may cover some of the cost of the deal by making lower than expected quarterly distributions to unitholders, according to the report.
- ETE reportedly may release a statement reaffirming its commitment to the deal as soon as this week; WMB said earlier this month that it was committed to the deal.
- The declining value of both ETE and WMB since the deal was announced has fueled speculation about whether the transaction will actually be completed, as WMB shares have fallen 48% while ETE units have declined 55%.
- Also: ETP +0.1%, WPZ -7.4%.
Tue, Jan. 19, 7:45 PM
- Energy Transfer Equity (NYSE:ETE) today tumbled to its lowest close since June 2010 amid doubts that its deal to buy Williams Cos. (WMB, WPZ) will cross the finish line.
- While WMB said last week it is committed to the deal, ETE has yet to explain how it will finance planned pipeline expansions after slumps by both stocks weakened their balance sheets, and some investors question whether ETE might better spend cash reducing debt and funding growth at pipeline partnerships it already controls, Bloomberg analyst Michael Kay says.
- "Might it fall apart, be restructured, or continue as currently contemplated?” asks Tortoise Capital's Brian Kessens. "The current deal spread of 25% indicates the market believes one of the former is more likely.”
- Energy Transfer Partners (NYSE:ETP) sank another 6% in today's trade, -31% YTD and the lowest close since September 2004.
Fri, Jan. 15, 6:15 PM
- Williams Cos.' (WMB, WPZ) board says it is "unanimously committed" to move forward with the planned $33B acquisition by Energy Transfer Equity ([ETE, ETP), easing concerns that the deal could fall apart due to the plunge in oil prices.
- Analysts have questioned whether the deal would be renegotiated or cancelled following a 60% drop in shares of WMB and ETE since Sept. 28, when the offer to buy WMB for $43.50/share was announced.
Williams Partners LP owns, operates, develops and acquires natural gas, natural gas liquids and oil gathering systems and other midstream energy assets. It provides gathering, treating and compression services. The company was founded in January 2010 and is headquartered in Oklahoma City, OK.
Sector: Basic Materials
Industry: Specialty Chemicals
Country: United States