Williams Being Acquired?

[swake]

This was too good of a picture...

Come on, why the hate? These "fiscal conservatives" just got a nice springtime in New York vacation on the public dime......

There's no money problems back in Oklahoma to worry about is there?

[Red Arrow]

I am sure the local population has a more favorable memory of  SunRay DX than anyone from Sunoco associated with the merger with DX.  It starts with those A$$holes from the east don't know anything about pipelines, completely neglecting the fact that petroleum pipelines existed east of the Mississippi River before anything in Oklahoma.

My memory of DX gasoline was that it gummed up my carburetor.  My dad worked for Sunoco/Sunray DX but I bought Texaco gasoline on a my dad's credit card for my car.  DX gasoline was crap.

[AquaMan]

She's damned if she doesn't go and looks like a Democrat big spender if she does. Tough spot. Oklahoma is rudderless.

[swake]

She's damned if she doesn't go and looks like a Democrat big spender if she does. Tough spot. Oklahoma is rudderless.

She's not talking to the right people.

[Conan71]

She's not talking to sleeping with the right people.

[DowntownDan]

What an odd situation for a smiling photo op.  A major employer is leaving and you're begging them to stay to avoid civic catastrophe.  Hey, lets smile for the camera on Wall Street!

[heironymouspasparagus]

I am sure the local population has a more favorable memory of  SunRay DX than anyone from Sunoco associated with the merger with DX.  It starts with those A$$holes from the east don't know anything about pipelines, completely neglecting the fact that petroleum pipelines existed east of the Mississippi River before anything in Oklahoma.

My memory of DX gasoline was that it gummed up my carburetor.  My dad worked for Sunoco/Sunray DX but I bought Texaco gasoline on a my dad's credit card for my car.  DX gasoline was crap.

Never had the carburetor gum up...got water once in a while, but not very often.  Also, used Texaco from time to time...supporting both local business entities.


As for the pipelines - they knew how to run them, but chose not to do it right because it cost money.  Same as today - much better, but still a lot of resistance.  If ya don't look, ya don't know, so can't be at fault....  Luckily that is changing.

Same reason we don't have 100% inspection on plastic natural gas pipe welded using fusion welding.  The technology has been available, reasonable (extremely cost effective), and absolutely accurate since the late 1980's.  Adds about 1 1/2 minutes to the process which is lost in the overall assembly of those pipes - inspection can be done while the next weld is made.  In fact, TDW and McElroy both had the inspection tools available, but were shot down by the gas companies who didn't want "know".  Williams observed but did not actively participate in implementing this inspection - DOT didn't have the regulations and wouldn't create the regulations due to industry resistance to learning what was going on.

[PonderInc]

While I agree that the trip to NYC was a PR stunt to impress people with no knowledge of the merger agreement, it's worth mentioning that the TW reported that it was NOT paid for with taxpayer money.  I assume that means that the chamber footed the bill. 

So, yes, I think it was a CYA action for all the political players (including the chamber) to make it look like they're doing something.  But there's no way that talking to Williams board members can change anything. This sucker is up to the shareholders, the courts, and possibly the June deadline, if we can hold out that long.

[Conan71]

Does Mike Neal remind anyone else of Barney Rubble?

[cannon_fodder]

From what I understand of the merger agreement is that it was valued at $43.50 - doesn't mean that is the value of it today. ETE agreed to purchase Williams at $6 billion in cash with a ratio of 1.5274 per share.
. . .
Edit: I'll add that as the value of the current deal is about $22.09 (cash/ETC stock) as Williams is currently trading $17.79 - that is only 80.5% of the value of the merger agreement. So I'm not doubting that investors see this as a bad deal - but it's not a 160% spread.

Thank you.

I was under the impression that the deal was based on value and not shares of ETE. For whatever reason all the articles I have read have failed to point out that the share portion is not a value proposition, hence the extreme concerns about dilution. The vast majority are a ratio of shares and not value based - but the way this deal has always been analyzed but financial news sources reflected the $43.50 value... it appears I failed to look into it further and I was wrong.

Still, the 80% spread puts it far, far beyond the spreads most hedge funds would sap up for a quick profit... unless something bad was going on. I think we are on the same page now.

- - -

May not matter anyway. ETE has come out and said it will not deliver a required report in order to move the deal further. Couple with the preferred offering it is seen as desperate attempt to get out of the deal without paying a fine.

Williams Cos. (NYSE:WMB) shareholders just got another dose of merger torture.

The stock tumbled 13% in 15 minutes on Monday after its merger partner Energy Transfer (NYSE:ETE) announced what appears to be its latest gambit to get out of the deal--its lawyers may not be able to deliver a 721 Opinion that the securities transfers involved would not be a taxable event. The opinion is required for the deal to close.

Williams, which is already in court with Energy Transfer over another merger issue, said it disagreed with the interpretation. Its stock recovered by the close but still was down 5% for the day.

ETE shares surged on hopes the merger would be canceled. The chart shows the symmetry of the reactions.

http://seekingalpha.com/article/3966203-williams-ete-merger-hell-just-gets-worse

http://www.thestreet.com/story/13536443/1/energy-transfer-equity-ete-stock-climbs-further-on-williams-cos-merger-snag.html

The bad news is Williams stock took a beating. Being contractually required to be in favor of the deal, Williams reportedly responded that they don't agree with the assessment and still recommend moving the merger forward. ETE up 5% as the deal looks closer to dead, Williams down 5%. Spread gets largely.

As I understand it, a 721 Opinion is standard and a boiler plate part of any merger with publicly held Limited Partnerships involved. I've never played in that arena, but the NY Times and other sources seem to make fun of the notion that a law firm wouldn't be able to do a 721 with no specified reason. I tried to find other deals in which a 721 created an issue, but this deal is the only one that comes up:
http://www.nytimes.com/2016/04/19/business/dealbook/already-troubled-pipeline-deal-gets-hung-up-onbasic-provision.html?_r=0

[Weatherdemon]

Williams shareholders wouldn't get ETE shares, they would get shares of ETC... which is an entity that does not yet exist and, these shares would not include voting rights.

[cannon_fodder]

Energy Transfer's CEO said yesterday that they "Can't close the William's deal." He blamed it on the tax opinion, but later said he would close the deal if William's dropped the demand for $6 Billion in cash. I feel the need to point out that I would close on almost any negotiated deal if the other party agreed to drop the price $6Bil. An all stock deal might also enable the mysteriously stuck tax opinion to be freed up from Energy Transfer's law firm.

http://www.nytimes.com/2016/05/06/business/dealbook/energy-transfer-sees-a-way-out-of-its-williams-pipeline-deal.html?_r=0
http://www.reuters.com/article/us-williams-m-a-idUSKCN0XW1G8

Both stocks are up on news of the deal taking a step closer to death.

[Conan71]

Energy Transfer's CEO said yesterday that they "Can't close the William's deal." He blamed it on the tax opinion, but later said he would close the deal if William's dropped the demand for $6 Billion in cash. I feel the need to point out that I would close on almost any negotiated deal if the other party agreed to drop the price $6Bil. An all stock deal might also enable the mysteriously stuck tax opinion to be freed up from Energy Transfer's law firm.

http://www.nytimes.com/2016/05/06/business/dealbook/energy-transfer-sees-a-way-out-of-its-williams-pipeline-deal.html?_r=0
http://www.reuters.com/article/us-williams-m-a-idUSKCN0XW1G8

Both stocks are up on news of the deal taking a step closer to death.

I have very limited knowledge of such things, but how difficult is it for an employee-led buyout of a company like Williams?  I'd love to see the future of Williams secured here in Tulsa and board members who favored this transaction removed.

[PonderInc]

Since WMB's market cap is currently around $13.7 billion, I doubt it.  Not sure we have that much in all our piggy banks.

From a recent Tulsa World article:
http://www.tulsaworld.com/blogs/business/caseysmith/casey-smith-will-shareholders-put-the-wmb-ete-saga-out/article_1a1258ff-2a46-550b-86a3-247abebaeb17.html?_dc=791323117677.8961

"As of figures from Dec. 31, institutional investment management companies owned nearly 75 percent of outstanding Williams shares, while brokerage firms owned just more than 9 percent, according to Ying Qi and Qian Zhang, who are also with Fredric E. Russell Investment Management Co.

Individual investors, which includes many Tulsa shareholders, account for less than 0.2 percent of the Williams stock, they said."

[heironymouspasparagus]

I have very limited knowledge of such things, but how difficult is it for an employee-led buyout of a company like Williams?  I'd love to see the future of Williams secured here in Tulsa and board members who favored this transaction removed.

Like all of these things...just needs financing.


This touches on something I mentioned a few years ago - when local companies grow up, the original people want to cash out, there should be a very heavily tax favored path that involves employee buyout.  And heavily tax unfavored to sell out to some out of state or international entity.  

Make it a capital gains type event (?) that will let the founder keep much more than any other scenario if the employees get to do the buyout.  Doing this on a Federal level would also be an excellent approach.