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Author Topic: Williams Being Acquired?  (Read 29740 times)
LandArchPoke
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« on: June 21, 2015, 08:03:52 pm »

Anyone with anymore information?

http://www.tulsaworld.com/business/energy/williams-cos-considering-strategic-alternatives-after-receiving-unsolicited-acquisition-offer/article_6e0d05b5-3698-5199-97cb-a4183b12fa44.html

http://www.bloomberg.com/news/articles/2015-06-21/williams-rejects-48-billion-buyout-proposal-exploring-options

This would not be a good thing for Tulsa at all. Losing one of our biggest corporate partners and there would likely be significant layoffs with any acquisition due to redundancies. Who knows what they would do with a Tulsa office...
« Last Edit: June 21, 2015, 08:16:12 pm by LandArchPoke » Logged
cannon_fodder
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« Reply #1 on: June 22, 2015, 07:17:39 am »

They've retained Barclays to essentially find more bidders:
http://www.wsj.com/articles/williams-cos-rejects-48-billion-buyout-offer-1434930560

The conventional wisdom is that Williams sector is due for serious mergers. If Williams is a loser in the merging, very bad news.
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« Reply #2 on: June 22, 2015, 11:07:08 am »

They've retained Barclays to essentially find more bidders:
http://www.wsj.com/articles/williams-cos-rejects-48-billion-buyout-offer-1434930560

The conventional wisdom is that Williams sector is due for serious mergers. If Williams is a loser in the merging, very bad news.

You would think Williams would be big enough to be the one buying other companies and not the other way around.  It will be interesting to see what happens.  These type of takeovers have not been kind to Tulsa in the past but you never know.
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Jeff P
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« Reply #3 on: June 22, 2015, 12:54:19 pm »

You would think Williams would be big enough to be the one buying other companies and not the other way around.

Well, we did acquire ACMP last year... in fact oddly enough I think we announced the acquisition almost a year ago to the day of yesterday's announcement.

ETE has been very aggressive on acquiring companies versus more organic growth. Recall that ETE and Williams got into a bidding war over Southern Union several years ago.

I obviously have a keen interest in how this whole thing plays out.

But in terms of size, you're right. The list of companies in the midstream sector that could acquire Williams is pretty small. ETE, Kinder Morgan and Enterprise are really about it.

Obviously a major could could acquire anyone they want, but so far the majors haven't had an appetite for acquiring large midstream/pipeline companies.
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DowntownDan
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« Reply #4 on: June 22, 2015, 01:37:16 pm »

I really hope Williams goes on the offensive and does some acquiring.  If they are the one bought out, might as well start sending a fleet of moving vans to Houston.
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Jeff P
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« Reply #5 on: June 22, 2015, 01:59:32 pm »

I really hope Williams goes on the offensive and does some acquiring.  If they are the one bought out, might as well start sending a fleet of moving vans to Houston.

ETE is based in Dallas.  Wink
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LandArchPoke
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« Reply #6 on: June 22, 2015, 04:49:11 pm »

ETE is based in Dallas.  Wink

Do you know much about where ETE's other major offices are at? Their HQ in Oak Lawn is tiny. I did see an article that said he would let Williams keep the name and HQ in Tulsa, so not sure if that was mean the WTZ (Williams Partners) that is merging into Williams or if ETE would become Williams and just ran by ETE management with the company staying HQ'ed in Tulsa?

Seems like a lot of analyst agree that this is just a stepping stone for Williams to get more $$$$ especially when you hire a broker (Barclays). Seems like money mangers are agreeing with the analysts too since Williams stock shot up to over $60.00 today.
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« Reply #7 on: June 22, 2015, 08:26:07 pm »

Do you know much about where ETE's other major offices are at? Their HQ in Oak Lawn is tiny. I did see an article that said he would let Williams keep the name and HQ in Tulsa, so not sure if that was mean the WTZ (Williams Partners) that is merging into Williams or if ETE would become Williams and just ran by ETE management with the company staying HQ'ed in Tulsa?

Seems like a lot of analyst agree that this is just a stepping stone for Williams to get more $$$$ especially when you hire a broker (Barclays). Seems like money mangers are agreeing with the analysts too since Williams stock shot up to over $60.00 today.

That's who my former employer hired while I was there (Barclay..well, didn't hire them, got acquired is more accurate).  That didn't turn out so great IMO.
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Jeff P
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« Reply #8 on: June 23, 2015, 08:21:52 am »

Do you know much about where ETE's other major offices are at? Their HQ in Oak Lawn is tiny. I did see an article that said he would let Williams keep the name and HQ in Tulsa, so not sure if that was mean the WTZ (Williams Partners) that is merging into Williams or if ETE would become Williams and just ran by ETE management with the company staying HQ'ed in Tulsa?

Yeah - that has been ETE's model on their recent acquisitions.  The companies they have acquired have stayed largely intact in whatever their location.  That doesn't mean that there wouldn't be certain duplication of services with some corporate functions, but they haven't made a habit of just moving everything to Dallas.

Quote
Seems like a lot of analyst agree that this is just a stepping stone for Williams to get more $$$$ especially when you hire a broker (Barclays). Seems like money mangers are agreeing with the analysts too since Williams stock shot up to over $60.00 today.

Well the stated reason for rejecting the offer was that it "significantly undervalued" Williams.  So on the face, yes, they would be rejecting it for more money.  What complicates it a bit is that it's an all equity offer.  That introduces the issue of valuating the underling currency (ETE equity) for the transaction.  If our board believes that ETE equity is overvalued and that our equity is undervalued then it's not as simple as $64>$60. (I don't know that is the case.. just raw speculation on my part)

As for hiring Barclays, that's pretty standard.  We've used them for all of our major financial transactions for years.

The thing is that as a public company, Williams' board has an obligation to its shareholders to evaluate an offer like this, and if they reject it (as they did) then they certainly have an obligation to make sure that the alternative -- whatever that might be -- is the better deal for the shareholders.  That's what the "strategic alternative review" (which includes Barclays and Lazard) is all about.

EDIT - I just wanted to clarify that the stuff above is just my opinion... I certainly don't have any inside info or anything like that...if I did, I certainly wouldn't be posting it here. Smiley
« Last Edit: June 23, 2015, 12:17:55 pm by Jeff P » Logged
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« Reply #9 on: June 23, 2015, 12:16:58 pm »

Where are most of the Access Midstream employees working, OKC or Tulsa?  I've heard they kept their OKC office mostly intact but wasn't sure if some positions moved to Tulsa after they were acquired last year.
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Jeff P
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« Reply #10 on: June 23, 2015, 12:19:53 pm »

Where are most of the Access Midstream employees working, OKC or Tulsa?  I've heard they kept their OKC office mostly intact but wasn't sure if some positions moved to Tulsa after they were acquired last year.

As far as I can tell, most of the former Access employees are still in OKC.  I know a few people here and there who moved to Tulsa, but on the whole, they are still in OKC. 

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« Reply #11 on: June 23, 2015, 02:38:54 pm »

The market seems to be cooling to the deal today. Williams is well off the prices seen yesterday.

But in this deal who is buying who? This is an all equity deal, and ETE has a market cap right now of $34B and is offering $48B for WMB and I read they may go as high as $70 per share or about $53B. That would give Williams shareholders something like 60% of the resulting company. Wouldn't the board members from the Williams side control the company?

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cannon_fodder
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« Reply #12 on: June 23, 2015, 02:39:45 pm »

Interestingly, Williams saw a massive stock bump and ETE saw a drop. Williams market cap is now 45bil and ETE is 35bil.

Would be fun to see a turnaround in the bidding. Smiley
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« Reply #13 on: June 23, 2015, 02:42:20 pm »

Interestingly, Williams saw a massive stock bump and ETE saw a drop. Williams market cap is now 45bil and ETE is 35bil.

Would be fun to see a turnaround in the bidding. Smiley

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Jeff P
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« Reply #14 on: June 23, 2015, 04:00:13 pm »

The market seems to be cooling to the deal today. Williams is well off the prices seen yesterday.

But in this deal who is buying who? This is an all equity deal, and ETE has a market cap right now of $34B and is offering $48B for WMB and I read they may go as high as $70 per share or about $53B. That would give Williams shareholders something like 60% of the resulting company. Wouldn't the board members from the Williams side control the company?

I understand what you're saying, but ETE and its shareholders would still be buying Williams... it doesn't matter that Williams has a larger market cap. 

If the Williams board, on behalf of the shareholders, agrees to be acquired then they are, in effect, giving up their right to control.  Even though they are receiving equity in the new company instead of cash, they are still selling and thus are "out."

That's the way I understand it, at least.




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