Williams Being Acquired?

[sgrizzle]

Curiously, the media release characterizes the purchase as a "merger" when it is nothing of the sort. The board is trying to make it more palatable to Williams shareholders, I suppose. And the respite for Williams Partners, LLP, is illusory. ETE will own 60% of WP, e.g. controlling interest. Once the "merger" is complete and Williams Cos no longer exists, what would stop ETE from "merging" with Williams Partners, just as Williams Cos was going to do? What is Mike Neal talking about?

The usual rules apply. Mergers and acquisitions only make sense if the costs of the resulting larger entity are lower than the costs were for the separate entities before the closing of the transaction. Revenues never increase as a result of a merger or acquisition. It is always costs that are forced to decrease, usually through layoffs of redundant personnel and closing of surplus facilities.

Williams has a history of some pretty stupid if not corrupt decisions. Williams Communications comes to mind. My brother lost a large piece of his life savings in that fiasco. Then there was the outsourcing to IBM of key IT functions that resulted in higher costs to the company and lower performance of those functions. They ended up re-insourcing some of the outsourced departments. Smart people.

Merger is an oxymoron

[Red Arrow]

Merger is an oxymoron

Or at least a euphemism.

[cannon_fodder]

I was speaking with a few TU students last night, one of whom has been interviewing for summer internships. I ask him if he had any interviews and he said an interview with Williams Companies went well. BUT...

When they called back after the interview, which was about a week after the sale was announced, he was told that all internships for the summer have been canceled.

Ouch. So there goes 100 young people from across the nation that would have spent a summer in Tulsa. The effect was much sooner than I thought... (unless it is unrelated)

[swake]

I was speaking with a few TU students last night, one of whom has been interviewing for summer internships. I ask him if he had any interviews and he said an interview with Williams Companies went well. BUT...

When they called back after the interview, which was about a week after the sale was announced, he was told that all internships for the summer have been canceled.

Ouch. So there goes 100 young people from across the nation that would have spent a summer in Tulsa. The effect was much sooner than I thought... (unless it is unrelated)

I heard the Denver office was just shut down. My wife has a relative that's been there 26 years and is just hoping to make to the end of the year.

[swake]

Seeking Alpha is reporting that the merger is likely dead. Which is very good news as from what I have heard not many people were going to be left in Tulsa

http://seekingalpha.com/article/3878506-energy-transfer-equity-merger-williams-looks-dead-cfo-jumps-ship

[Conan71]

Whew....

For now.

[PonderInc]

I heard the Denver office was just shut down. My wife has a relative that's been there 26 years and is just hoping to make to the end of the year.

WPX had the Denver office, not WMB.  WPX split off from WMB a few years ago.  Totally different company.

[cannon_fodder]

Wall Street Journal is on board now, not calling the deal dead itself, but quoting hedge fund managers assuming the deal is dead:

"Having the CFO leave before the deal closes, maybe before the financing deal closes, looks pretty bad," said Jay Rhame, who co-manages $2.5 billion in utilities and energy infrastructure at Reaves Asset Management, a Williams shareholder. "So I think people are looking at a pretty low probability on the deal actually closing. I think it probably points to bigger problems than what's publicly known right now."

http://blogs.wsj.com/cfo/2016/02/08/cfo-departure-at-energy-transfer-equity-rattles-investors-raises-merger-questions/

If the deal fails, it is probably good news for Tulsa in the long run. The bad news is that it is a reflection of how bad the energy sector is right now. William's largest client (and outstanding line of credit) is reported to be Chesapeake - who has been fighting of rumors of bankruptcy and seen their stock slip below $2 (peaked at $67 in 2008, flirted with $30 in 2014). I know it is a boom or bust cycle, but with the same people involved 3 times in the same lifetime - you'd think, well, sheesh!

[Conan71]

Wall Street Journal is on board now, not calling the deal dead itself, but quoting hedge fund managers assuming the deal is dead:
http://blogs.wsj.com/cfo/2016/02/08/cfo-departure-at-energy-transfer-equity-rattles-investors-raises-merger-questions/

If the deal fails, it is probably good news for Tulsa in the long run. The bad news is that it is a reflection of how bad the energy sector is right now. William's largest client (and outstanding line of credit) is reported to be Chesapeake - who has been fighting of rumors of bankruptcy and seen their stock slip below $2 (peaked at $67 in 2008, flirted with $30 in 2014). I know it is a boom or bust cycle, but with the same people involved 3 times in the same lifetime - you'd think, well, sheesh!

Maybe Tom Kivisto could step in and save Chesapeake.

Wait...what?

[Townsend]

WPX had the Denver office, not WMB.  WPX split off from WMB a few years ago.  Totally different company.

WPX just shut down their OKC office.

[Conan71]

WPX just shut down their OKC office.

Apparently, they had trickled down to 80 jobs from what I read.  

OKC is starting into tough times not unlike the early/mid 1980's.  Optimism is way off.  According to my son-in-law who works as a rep for a construction supply company, OKC's building permits are off by roughly 1/2- year over year.  Tulsa is still plodding along at near the same rate.

You start sloughing off that much fall off industry like construction and it's an indicator of all the other business that is likely suffering or will.

Seems odd since OKC has so much government-based jobs between being the seat of state government and all the federal jobs with Tinker, FAA, etc.

I'm simply glad I sell steam and hot water in my day job.  It never goes out of style.

[swake]

Apparently, they had trickled down to 80 jobs from what I read.  

OKC is starting into tough times not unlike the early/mid 1980's.  Optimism is way off.  According to my son-in-law who works as a rep for a construction supply company, OKC's building permits are off by roughly 1/2- year over year.  Tulsa is still plodding along at near the same rate.

You start sloughing off that much fall off industry like construction and it's an indicator of all the other business that is likely suffering or will.

Seems odd since OKC has so much government-based jobs between being the seat of state government and all the federal jobs with Tinker, FAA, etc.

I'm simply glad I sell steam and hot water in my day job.  It never goes out of style.

State government layoffs are just a matter of time now.

[erfalf]

Apparently, they had trickled down to 80 jobs from what I read.  

OKC is starting into tough times not unlike the early/mid 1980's.  Optimism is way off.  According to my son-in-law who works as a rep for a construction supply company, OKC's building permits are off by roughly 1/2- year over year.  Tulsa is still plodding along at near the same rate.

You start sloughing off that much fall off industry like construction and it's an indicator of all the other business that is likely suffering or will.

Seems odd since OKC has so much government-based jobs between being the seat of state government and all the federal jobs with Tinker, FAA, etc.

I'm simply glad I sell steam and hot water in my day job.  It never goes out of style.

My guess is OKC was far more exposed to natural gas price fluctuations. Whereas Tulsa has been a bit more insulated due to it's huge exposure to mid-stream type businesses. Natural gas prices have been horrid for some time now. Anecdotaly, the Mississippi Lime area that was a hot play is already fizzling, partly due to the regulators tightening up due to earthquakes, partly because production was just not what they thought. 100% of Sandridge's exposure is in this region and they are all but shot down by the corporation commission. Other players are Devon, Chesapeake, American Energy (all OKC companies).

[LeGenDz]

Devon Energy to lay off 700 in OKC

Devon Energy Corp. said Tuesday it will lay off about 1,000 employees, including 700 in Oklahoma City.

The Oklahoma City layoffs are expected to complete by Thursday, the company said.

The Oklahoma City oil and natural gas company said it will reduce its workforce by 20 percent in the first quarter of 2016, marking a total cut of about 25 percent over the past 12 months. A Devon spokesman said the company had 5,000 employees as of the end of 2015.

"Devon has taken these and other cost-reduction actions primarily as a result of the current commodity price environment," the company said in a statement Tuesday. "The company must reduce expenses across the entire organization to maintain its financial flexibility and competitiveness."

Another 600 employees will be affected by the sale of non-core upstream assets, the company said. Most of those cuts will be field-level positions.

"In most cases, we expect these individuals will go work for the acquiring companies," the company said.

Also Tuesday, Devon said it had a net loss of $4.5 billion, or $11.12 cents a share, in the fourth quarter, driven largely by a non-cash, asset impairment charge of $5.3 billion. In the year-ago quarter, Devon recorded a loss of $408 million, or $1.01 a share.

Adjusted for the accounting charge, the company posted core earnings of $319 million, or 77 cents a share. Core earnings for the year were $1.04 billion, or $2.52 a share.

http://newsok.com/article/5479257

[Breadburner]

Lets build a great big tower....Instead saving our money for leaner times.....!!!!