Sept 28 Pipeline company Energy Transfer Equity LP said it would buy Williams Cos Inc in a cash-and-stock deal valued at about $37.7 billion, including debt. Energy Transfer Corp. will be publicly traded on the NYSE under the symbol “ETC”. ETP has natural gas operations that include more than 17, 500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas.
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Williams had hired advisers to run an auction that drew other bidders, according to people familiar with the matter. The $43.50 a share price represents a 4.6% premium to the Williams closing price on September 25. Stockholders may elect to receive a prorated cash amount and/or 1.8716 ETC common shares for each share of WMB stock.
For the first six months of this year, Williams Cos.net income fell 24 percent to $184 million from $243 million. Energy Transfer argued its bid would provide better value to Williams investors.
“The deterioration of oil field economics lately has accelerated the need for consolidation”, said Ethan Bellamy, an analyst at Robert W. Baird, in an interview earlier this month.
In the deal with Energy Transfer Equity, Williams will keep its company name and remain headquartered in Tulsa, Oklahoma. But a prolonged downturn could call into question the need for more infrastructure, and the prospect of slower production growth could mean fewer opportunities for companies to grow organically. (NYSE:WMB) (‘Williams’), the owner of Williams Partners’ general partner, whereby both parties have terminated their previously announced merger agreement under which Williams was to acquire all of the public outstanding common units of Williams Partners in an all stock-for-unit transaction.
Williams and Energy Transfer have butted heads in previous deals.
“I am excited that we have now agreed to the terms of this merger with Williams”, Energy Transfer’s Chairman Kelcy Warren said in a news release.
Williams in June had rejected an unsolicited $48 billion offer from Energy Transfer as too low but the company’s worth has declined since then amid the continuing slide in oil prices.
Energy Transfer Equity is a master limited partnership that owns the general partner and 100% of the incentive distribution rights of Energy Transfer Partners LP and Sunoco LP.
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Cal-Maine Foods Inc (CALM) tumbled 10.3% or $5.91 to $51.73 after the shell eggs producer said revenues in the first-quarter ending on August 29 soared 70.9% from a year ago to $609.9 million. The total value of the transaction was $21,448. Except he’s now offering $6 billion in cash, a potentially enticing deal for investors who’ve had enough of the volatile energy market and want out.
