Williams Reiterates Commitment to Merger With Energy Transfer
March 14 2016 - 10:44AM
Dow Jones News
By Tess Stynes
Williams Cos. (WMB) said that it remains committed to closing
its $32.6 million merger with Energy Transfer Equity LP (ETE) and
that expects the deal will be completed in the first half of this
year, despite more signs of stress between the pipeline companies
last week.
Williams said the "shortest case scenario" for a required vote
of Williams holders on the deal could be around April 20. A company
executive made the comments in a town-hall meeting with employees,
according to a filing with the U.S. Securities and Exchange
Commission.
Last week, Energy Transfer issued convertible units to certain
investors, including the company's chief executive, Kelcy Warren,
to raise funds to help cover the $6 billion it will owe Williams
investors when the deal closes. Energy Transfer had proposed a
convertible unit offering that would have been open to the public,
but it met resistance from Williams.
According to Williams' SEC filing on Monday, Chief Executive
Alan Armstrong, responding to a question in the town-hall meeting,
also said the company is "keeping our eye towards making sure that
we would know what we would do in a standalone situation." He added
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 L.P. (WPZ), Mr. 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."
"So that is not something that we would act on immediately,
likely, and we would probably review what all our options were on
that front," Mr. Armstrong said.
Shares of Williams Cos. slipped 0.8% to $15.88 in morning
trading in New York, while Energy Transfer shares rose 0.6% to
$6.86.
Williams last year resisted Energy Transfer's initial buyout
overture but eventually accepted a lesser price amid slumping
energy stocks.
Energy companies had a rough ride in 2015, with natural gas and
oil prices plummeting.
Many pipeline companies had said they were mostly insulated from
low energy prices because most of their revenue is based on fixed
fees. However, in recent quarters, signs that the pipeline industry
isn't immune to the commodities rout have slammed the sector's
stocks.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
March 14, 2016 10:29 ET (14:29 GMT)
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