Williams: Proxy Firm ISS Recommends Holders Approve Merger With ETE
June 15 2016 - 11:32AM
Dow Jones News
By Tess Stynes
Williams Cos. (WMB) said proxy advisory firm Institutional
Shareholder Services is recommending that the pipeline giant's
shareholders vote in favor of the company's pending acquisition by
rival Energy Transfer Equity LP (ETE) despite pressures from low
commodities prices.
The Tulsa, Okla., company's shareholders are set to vote on the
troubled merger deal--valued around $33 billion when it was
announced--on June 27.
Williams said that in its recommendation ISS noted items such as
the significant cash component of the deal, the combined company's
more diversified customer base and an opportunity for shareholder
to have a nearly 50% equity stake in a merged company that is
expected to have much stronger cash flow than Williams would on its
own.
In a letter urging its shareholders to support the deal,
Williams also noted the merger would lead to "significant
synergies" while also reiterating that Williams' dividend could be
cut if the pending deal isn't completed. Williams said that in a
standalone scenario that efforts to improve its balance sheet also
would likely include further capital spending cuts, asset sales and
equity issuance.
Energy Transfer has been aiming to restructure or escape the
planned acquisition in the wake of low commodities prices that have
spread pain through the energy sector. The two pipeline companies
have been in a legal tussle as Williams seeks to undo a convertible
share issue by Energy Transfer to help fund the deal and force
Energy Transfer to proceed with their merger agreement.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 15, 2016 11:17 ET (15:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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