Williams Being Acquired?

[LandArchPoke]

The world of investors disagrees with you. They put the odds of the deal happening at less than 50%. Hence, Williams trading at $18 when the bid is $43.50. If the deal was seen as likely to go through, there is no reason NOT to hold $43.50 worth of stock you can buy for $18. Buy, hold, deal closes, sell. POOF 150% profit. But most investors seem to think the deal doesn't go through.  Hence, $18 and falling.

This is a bit overstated. Yes there is a spread between the value of the original offering and where both are trading now - which does signal that most investors are shying away from this merger. However, the main reason Williams stock is $18 is the decline in oil prices, not the merger. Every oil/gas company has lost similar value in their stock since. The spread is actually only about -10%, but most mergers you see the opposite - you can't pin the entire decline of the stock on that, it's 90% because of crude prices.

Several sources have hinted that ETE is trying to scuttle the deal by making Williams Shareholders vote it down. They have reduced the predicted synergy savings from $2bil to a few hundred million (with $6Bil in new debt they may not be able to raise). They violated the BOD by offering convertible shares (effectively diluting William's shareholder value by 7%). They have made public plans to gut most of their white collar jobs (Williams employs more than ETE, and they are gutting Williams white collar jobs) who are almost all shareholders to some extent.  After unnecessarily filing plans to gut Tulsa and OKC they announced plans to incentive ETE management to stay on - when the industry is tanking, where are they going to go?

The only way out where no one has to pay is if the shareholders vote it down. Williams Board is utterly powerless, if they even suggest to shareholders they should vote it down they owe $1.4B. If ETE backed out they owe a few hundred million and look weak (remember, their founder runs it and has an ego). Williams could play chicken and call ETEs ability to raise the $6bil, causing them to breach and trying to collect breach fees. OR... the companies could put adults in the room and decide this doesn't work anymore.

/wishful thinking?

ETE is certainly doing a lot to make Williams investors/stockholders uneasy, I'm not doubting that. The examples you stated are all very much in that realm. You are wrong on the shareholder vote though, Williams will still be on the hook for $50-60 million to pay to ETE if shareholders vote down the merger. That might be worth the price to pay for many shareholders.

Williams is not going to pay the $2 billion break up fee to walk alway from the merger, we can rule that option out. So really there's only 2 hopes that the deal collapses, 1. is the shareholder vote 2. is the breach of merger agreement, if the judge sides on Williams - depending on the extent of "damages" this could allow Williams to say to hell with you ETE we don't want to merger anymore. It's still significantly more likely that the judge will just undo the convertible shares offering (which is all Williams is asking for anyways in the lawsuit), and the merger agreement will follow through in its original state.

Yea, my bad on big D. Too many Houston folks involved...
Sunoco is actually PA I believe though.

Either way, as mentioned in the lawsuit, Warren doesn't want anyone telling him how to run his business and didn't even listen to his former CFO who put the deal together when he said it wasn't going to work under current market conditions. I doubt he would even give the governor and the mayor the time of day.

Warren is an ego manic. It's well documented in the Dallas papers. Klyde Warren Park is named after his 6 year old son (the park that caps the north end of downtown Dallas to Uptown over Woodall Rogers Freeway).

Sunoco was in PA. It's current HQ for mailing purposes still in PA - however about 90% of its staff is not there anymore, with most moving into the new offices by NorthPark recently. Essentially what ETE will do with Williams. They will keep the WPZ mailing address in Tulsa and gut the staff or move them to Dallas.

I don't really care if he gives them the time or day or not - but putting on a dog and pony show saying they are doing everything they can by flying to NY on tax payers dime when it has nothing to do with any of the decisions that will be made of keeping Williams employment levels the same in Oklahoma pisses me off. They should be calling Kelcy everyday and sitting outside his office building to get a chance to speak with him. That would be way more worthwhile. OR, how about this. Put together an economic incentives package and pro's for why keeping employment of Williams in Tulsa/OKC and release it publicly to shareholders and investors, that would be the quickest way to put pressure on ETE to not gut the Oklahoma offices. They won't do that though, they'd rather fly to NYC and pander to the media that they care, when in reality they are doing nothing to help the situation.

[cannon_fodder]

This is a bit overstated. Yes there is a spread between the value of the original offering and where both are trading now - which does signal that most investors are shying away from this merger. However, the main reason Williams stock is $18 is the decline in oil prices, not the merger. Every oil/gas company has lost similar value in their stock since. The spread is actually only about -10%, but most mergers you see the opposite - you can't pin the entire decline of the stock on that, it's 90% because of crude prices.

If investors believed the deal was going through, the price of crude would be irrelevant. Who cares if the new company can't make money? Who cares if ETEs debt structure is unmanageable? If you are getting $43.50 worth of cash and equity for your share of Williams, what happens after doesn't matter at all.  As long as I cash out before the bankruptcy, I'm golden.

Energy prices matter because investors no longer think the deal makes sense, that it can be financed, and are losing faith that it will happen. Hence, the share price is reflecting the value of the company + risk. It isn't reflecting the but out bid.

Halliburton is merging/buying Baker Hughes in another huge energy infrastructure deal. The variance between bid price and current share price is 40% and that is the second highest spread on the board right now.  The variance on the Williams deal is 160%. Both are heavily dependent on energy prices, and while both indicate significant risk --- only one is monstrously out of whack.

There are entire groups of investors inside the big houses who specialize in merger arbitration (risk arbitration). Spreads of 5-10% are fairly common. Spread above that indicate risk. In 2007 only 5% of deals that closed had spreads above 15% (p. 57, 2007 represents the most recent data in the publication).  Larger spreads in the 40 and even 50% range were seen in the 95% end of the scale during the 1990s, but nothing like 160%.  Successful deals see the spread narrow, failed deals see the spread gap further. 

If someone thinks a deal is going to happen, they buy the stock at the 10% discount, wait for the close, and cash out. Easy 10% short term gain. In the Williams case, you could net a 160% gain in a matter of months if this thing closes. Yet investment houses aren't jumping it.

[davideinstein]

I thought the Baker Hughes deal got rejected?

[LandArchPoke]

If investors believed the deal was going through, the price of crude would be irrelevant. Who cares if the new company can't make money? Who cares if ETEs debt structure is unmanageable? If you are getting $43.50 worth of cash and equity for your share of Williams, what happens after doesn't matter at all.  As long as I cash out before the bankruptcy, I'm golden.

Energy prices matter because investors no longer think the deal makes sense, that it can be financed, and are losing faith that it will happen. Hence, the share price is reflecting the value of the company + risk. It isn't reflecting the but out bid.

Halliburton is merging/buying Baker Hughes in another huge energy infrastructure deal. The variance between bid price and current share price is 40% and that is the second highest spread on the board right now.  The variance on the Williams deal is 160%. Both are heavily dependent on energy prices, and while both indicate significant risk --- only one is monstrously out of whack.

There are entire groups of investors inside the big houses who specialize in merger arbitration (risk arbitration). Spreads of 5-10% are fairly common. Spread above that indicate risk. In 2007 only 5% of deals that closed had spreads above 15% (p. 57, 2007 represents the most recent data in the publication).  Larger spreads in the 40 and even 50% range were seen in the 95% end of the scale during the 1990s, but nothing like 160%.  Successful deals see the spread narrow, failed deals see the spread gap further. 

If someone thinks a deal is going to happen, they buy the stock at the 10% discount, wait for the close, and cash out. Easy 10% short term gain. In the Williams case, you could net a 160% gain in a matter of months if this thing closes. Yet investment houses aren't jumping it.

Maybe i'm confused, but are you saying that the only reason their stocks have decline is solely on the merger? If so, that's just not true. The stocks have declined because of oil prices. Which in turn means their incomes/revenue decline. That makes a merger less than ideal, because as oil prices remain low - the synergies and ability to maintain Williams by ETE becomes more complicated. Not to mention the financing of the $6 billion in cash that you mention (which I still have no idea how they will do given the current equities market for oil/gas). I assume some bank will be stupid enough to finance it, but it will likely be at an astronomical interest rate. Now some have questioned the true synergies the companies would create, but again that is not the reason for the huge discount/spread that has been created - it's because of oil prices.

In the same sense, your saying that if it was a good deal then the stock prices should have rose? Even as oil prices declined. That just doesn't make sense to me, but I might be misunderstanding what you are saying.

Warren made a huge bet - he thought he was getting Williams on the cheap and that oil prices would rebound back to $75+ by this year, well they didn't. Because of that, and the likelyhood oil will be $40 through 2016 and probably 2017... his ego could be the undoing of his empire. The investment houses know this, and it's the same reason any other oil/gas mergers have similar spreads.

[davideinstein]

WMB dropped for three reasons: Commodity prices, stake in CHK and the merger.

[Red Arrow]

Sunoco is actually PA I believe though.

It certainly used to be in Philadelphia, PA.  Our family moved to Oklahoma from near Philly because of the "merger" with SunRay DX.

[erfalf]

Maybe i'm confused, but are you saying that the only reason their stocks have decline is solely on the merger? If so, that's just not true. The stocks have declined because of oil prices. Which in turn means their incomes/revenue decline. That makes a merger less than ideal, because as oil prices remain low - the synergies and ability to maintain Williams by ETE becomes more complicated. Not to mention the financing of the $6 billion in cash that you mention (which I still have no idea how they will do given the current equities market for oil/gas). I assume some bank will be stupid enough to finance it, but it will likely be at an astronomical interest rate. Now some have questioned the true synergies the companies would create, but again that is not the reason for the huge discount/spread that has been created - it's because of oil prices.

In the same sense, your saying that if it was a good deal then the stock prices should have rose? Even as oil prices declined. That just doesn't make sense to me, but I might be misunderstanding what you are saying.

Warren made a huge bet - he thought he was getting Williams on the cheap and that oil prices would rebound back to $75+ by this year, well they didn't. Because of that, and the likelyhood oil will be $40 through 2016 and probably 2017... his ego could be the undoing of his empire. The investment houses know this, and it's the same reason any other oil/gas mergers have similar spreads.

Basically cannon is just saying that generally transactions like this are as close to a no risk investment as there is. Once a merger is announced, the acquired company's stock usually snaps quickly to near what the offer price is. Because it is usually easy money. But something (a lot of things in this case) are causing investors to see a rick in that proposition where usually there is virtually none. In my mind the difficulties in ETE getting financing (due in large part to a poor energy market) are going to be the undoing of this deal. But they will figure out a way to get out of it without the penalties I'm sure (because they would be crippling for ETE). It's just crazy how both sides have to "act" like they want this to happen or else. They are both taking actions that are just done to dare the other to back out. Pretty childish in my opinion.

[cannon_fodder]

Than you erfalf.

I'm not sure how I can be more clear. If Williams company announced it was no longer producing anything, it should have a minimal effect on their stock price because they are under a contract with ETE saying everyone who owns Williams stock gets $43.50 a share. As long as people think the contract is going to be executed, the piece of paper is worth $43.50 regardless of how worthless the underlying company now is.

Let me try an analogy:

I am the proud owner of the photography book Tulsa, by Larry Clark. My copy is a signed copy worth about $50 new, lets say it is worth $43.50 used. I sell it to you for $43.50 and you write me a check (we could make this more complicated and say I agree to give you the book at a late date, but it is not necessary to illustrate the point). Instead of going to the bank and cashing the check, I decide to sign it over to someone else.

If you write me a check for $43.50 and everyone thinks you have $43.50 in the bank, people are willing to pay pretty darn close to $43.50 for me to sign that check over to them (with a slight risk arbitration factor because there is some hassle, some delay, and some risk it won't clear). Only if they think the consummating transaction isn't going to happen (that is, the check won't clear) would I be unable to find a buyer somewhere above the $30 mark.  Once you write the check (sign the contract) no one gives a damn if the book I sold you is really worth $43.50. It's only weather or not the check will clear.

So if you write me a check for $43.50 and I can't find someone to pay $20 for it - it is a reflection NOT on the value of the DVD I sold set I sold you, but rather on the fact that people don't think that check is going to clear. If Larry Clark starting giving away that book by the truckload, your check should still be worth close to $43.50 if people thought you had the money in the bank to cover it.

Ergo, int he Williams transaction - the underlying value of the Williams stock is only relevant in so far as it may be a reflection that the deal will not happen. Energy prices are only relevant in so much as they are a reflection that the deal won't happen. By signing the contract to buy Williams shares for $43.50 each, ETE has written a check. People just don't think it is going to clear.

[heironymouspasparagus]

It certainly used to be in Philadelphia, PA.  Our family moved to Oklahoma from near Philly because of the "merger" with SunRay DX.

The one where Sunoco bought Sunray DX and took over - not much of a merger.  Then really did a number on it.  More of a rape and pillage event.  Problem is they had a lot of very good people in both Tulsa and Philly doing the work, with idiots at the top level running the show.  I bet your Dad was one of the good ones.  His bosses, bosses, bosses were idiots.  As were my Dad's....


Who in the world would ever think that getting out of exploration and production, at a time of massive crude price uncertainty, was a good idea...??   You can't go to the open market and pay $4.00 a gallon for crude from your competitors....


Red, don't know if you have found this before, but it's kind of interesting early history of DX.

http://www.oldgas.com/shoptalk/ubb/Forum4/HTML/001829.html

[Hoss]

The one where Sunoco bought Sunray DX and took over - not much of a merger.  Then really did a number on it.  More of a rape and pillage event.  Problem is they had a lot of very good people in both Tulsa and Philly doing the work, with idiots at the top level running the show.  I bet your Dad was one of the good ones.  His bosses, bosses, bosses were idiots.  As were my Dad's....


Who in the world would ever think that getting out of exploration and production, at a time of massive crude price uncertainty, was a good idea...??   You can't go to the open market and pay $4.00 a gallon for crude from your competitors....


Red, don't know if you have found this before, but it's kind of interesting early history of DX.

http://www.oldgas.com/shoptalk/ubb/Forum4/HTML/001829.html

I have two generations of that company in my family.  My grandfather worked for them from around 1948 to his retirement in the early 80s.  My dad worked for them from 1980 until his retirement in 2000 or so.  It was very nearly three generations as I was interviewed but ultimately found better work.  During those times my dad and grandfather both worked for them (and actually my grandmother worked as a part time nurse for them also) they were a great organization to work for.  In the later years, not so much I guess.

[heironymouspasparagus]

I have two generations of that company in my family.  My grandfather worked for them from around 1948 to his retirement in the early 80s.  My dad worked for them from 1980 until his retirement in 2000 or so.  It was very nearly three generations as I was interviewed but ultimately found better work.  During those times my dad and grandfather both worked for them (and actually my grandmother worked as a part time nurse for them also) they were a great organization to work for.  In the later years, not so much I guess.

Same here.  Starting in 1946 to 1970, right after the war.  And 1949 until about 1990.  That place paid for my raisin'.  Progressively went downhill in the 80's and eventually was really good place to be "from"....   And not anything to do with the people that worked there.  Too much "Harvard MBA"-itis.

Had another ancestor who worked for W. R. Stubbs - an oil distributor out of Henryetta with branch office over by refinery - big DX distributor.  They named a road in Henryetta after Stubbs.  I would visit the office as a kid and there was always a driver I could talk into taking me on a ride in one of their big trucks.  My favorite was the GMC 'Crackerbox' tractors they used for several years.

[LandArchPoke]

Than you erfalf.

I'm not sure how I can be more clear. If Williams company announced it was no longer producing anything, it should have a minimal effect on their stock price because they are under a contract with ETE saying everyone who owns Williams stock gets $43.50 a share. As long as people think the contract is going to be executed, the piece of paper is worth $43.50 regardless of how worthless the underlying company now is.

Let me try an analogy:

I am the proud owner of the photography book Tulsa, by Larry Clark. My copy is a signed copy worth about $50 new, lets say it is worth $43.50 used. I sell it to you for $43.50 and you write me a check (we could make this more complicated and say I agree to give you the book at a late date, but it is not necessary to illustrate the point). Instead of going to the bank and cashing the check, I decide to sign it over to someone else.

If you write me a check for $43.50 and everyone thinks you have $43.50 in the bank, people are willing to pay pretty darn close to $43.50 for me to sign that check over to them (with a slight risk arbitration factor because there is some hassle, some delay, and some risk it won't clear). Only if they think the consummating transaction isn't going to happen (that is, the check won't clear) would I be unable to find a buyer somewhere above the $30 mark.  Once you write the check (sign the contract) no one gives a damn if the book I sold you is really worth $43.50. It's only weather or not the check will clear.

So if you write me a check for $43.50 and I can't find someone to pay $20 for it - it is a reflection NOT on the value of the DVD I sold set I sold you, but rather on the fact that people don't think that check is going to clear. If Larry Clark starting giving away that book by the truckload, your check should still be worth close to $43.50 if people thought you had the money in the bank to cover it.

Ergo, int he Williams transaction - the underlying value of the Williams stock is only relevant in so far as it may be a reflection that the deal will not happen. Energy prices are only relevant in so much as they are a reflection that the deal won't happen. By signing the contract to buy Williams shares for $43.50 each, ETE has written a check. People just don't think it is going to clear.

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. As 63% of the total value of this merger agreement is based on a ratio of the stock, your analogy isn't the same. The only way that would be similar is if ETE was purchasing Williams for 100% cash/check/etc. If I tried to purchase your album with $8 in cash and 1.5 shares of ETE stock valued at $35.50 - people wouldn't be falling over themselves because it's guaranteed to stay at that amount. They would look at the fundamentals of ETE, it's long term profitability, market factors, etc. and say they is not that great of a deal because oil prices have tanked and are not recovering. While I originally purchased that album for $43.50, since the transaction took say a year - I'm now only purchasing it for approximately half the value due to the extreme market conditions in the oil industry between when we agreed on this purchase and today.

So today if it works out even, $6 billion cash and equal ETC stock. Each Williams shareholder will get $8.01 in cash, and $14.08 in ETC common stock (at the 1.5274 ratio - as it is hooked to ETE stock value, and guaranteed for 2 years only). Meaning that the true value of this deal isn't $43.50 per share, it's really only $22.09 per share at the moment. Because it's a variable based on the value of ETE stock - that means the value of this deal is very dependent on oil prices. Declining revenues in ETE because of suppressed oil prices is where the majority of the risk of this merger is coming from. The spread comparison from $43.50 to me is misleading, and not a true representation of the current value of the deal.

http://www.streetinsider.com/Corporate+News/Energy+Transfer+Equity+(ETE),+Williams+(WMB)+Enter+$37.7B+Merger+Agreement/10923029.html

Under the terms of the transaction, Energy Transfer Corp LP ("ETC"), an affiliate of ETE, will acquire Williams at an implied current price of $43.50 per Williams share. Williams' stockholders will have the right to elect to receive as merger consideration either ETC common shares, which would be publicly traded on the NYSE under the symbol "ETC", and / or cash. Elections to receive ETC common shares and cash will be subject to proration. Cash elections will be prorated to the extent they exceed $6.05 billion in the aggregate and stock elections will be prorated to the extent the full $6.05 billion cash pool is not utilized. Williams stockholders electing to receive stock consideration will receive a fixed exchange ratio of 1.8716 ETC common shares for each share of WMB common stock, before giving effect to proration. If all Williams' stockholders elect to receive all cash or all stock, then each share of Williams common stock would receive $8.00 in cash and 1.5274 ETC common shares. In addition, WMB stockholders will be entitled to a special one-time dividend of $0.10 per WMB share to be paid immediately prior to the closing of the transaction. The special one-time dividend is in addition to the regularly scheduled WMB dividends to be paid before closing.

There is obviously the chance of some variation depending on how much cash people request, the exchange ratio of ETC could go up/down some from the 1.5274.

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.

[swake]

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. As 63% of the total value of this merger agreement is based on a ratio of the stock, your analogy isn't the same. The only way that would be similar is if ETE was purchasing Williams for 100% cash/check/etc. If I tried to purchase your album with $8 in cash and 1.5 shares of ETE stock valued at $35.50 - people wouldn't be falling over themselves because it's guaranteed to stay at that amount. They would look at the fundamentals of ETE, it's long term profitability, market factors, etc. and say they is not that great of a deal because oil prices have tanked and are not recovering. While I originally purchased that album for $43.50, since the transaction took say a year - I'm now only purchasing it for approximately half the value due to the extreme market conditions in the oil industry between when we agreed on this purchase and today.

So today if it works out even, $6 billion cash and equal ETC stock. Each Williams shareholder will get $8.01 in cash, and $14.08 in ETC common stock (at the 1.5274 ratio - as it is hooked to ETE stock value, and guaranteed for 2 years only). Meaning that the true value of this deal isn't $43.50 per share, it's really only $22.09 per share at the moment. Because it's a variable based on the value of ETE stock - that means the value of this deal is very dependent on oil prices. Declining revenues in ETE because of suppressed oil prices is where the majority of the risk of this merger is coming from. The spread comparison from $43.50 to me is misleading, and not a true representation of the current value of the deal.

http://www.streetinsider.com/Corporate+News/Energy+Transfer+Equity+(ETE),+Williams+(WMB)+Enter+$37.7B+Merger+Agreement/10923029.html

Under the terms of the transaction, Energy Transfer Corp LP ("ETC"), an affiliate of ETE, will acquire Williams at an implied current price of $43.50 per Williams share. Williams' stockholders will have the right to elect to receive as merger consideration either ETC common shares, which would be publicly traded on the NYSE under the symbol "ETC", and / or cash. Elections to receive ETC common shares and cash will be subject to proration. Cash elections will be prorated to the extent they exceed $6.05 billion in the aggregate and stock elections will be prorated to the extent the full $6.05 billion cash pool is not utilized. Williams stockholders electing to receive stock consideration will receive a fixed exchange ratio of 1.8716 ETC common shares for each share of WMB common stock, before giving effect to proration. If all Williams' stockholders elect to receive all cash or all stock, then each share of Williams common stock would receive $8.00 in cash and 1.5274 ETC common shares. In addition, WMB stockholders will be entitled to a special one-time dividend of $0.10 per WMB share to be paid immediately prior to the closing of the transaction. The special one-time dividend is in addition to the regularly scheduled WMB dividends to be paid before closing.

There is obviously the chance of some variation depending on how much cash people request, the exchange ratio of ETC could go up/down some from the 1.5274.

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.

Iran refusing to come to the table today to support oil prices is going to further hurt oil prices.

[Oil Capital]

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. As 63% of the total value of this merger agreement is based on a ratio of the stock, your analogy isn't the same. The only way that would be similar is if ETE was purchasing Williams for 100% cash/check/etc. If I tried to purchase your album with $8 in cash and 1.5 shares of ETE stock valued at $35.50 - people wouldn't be falling over themselves because it's guaranteed to stay at that amount. They would look at the fundamentals of ETE, it's long term profitability, market factors, etc. and say they is not that great of a deal because oil prices have tanked and are not recovering. While I originally purchased that album for $43.50, since the transaction took say a year - I'm now only purchasing it for approximately half the value due to the extreme market conditions in the oil industry between when we agreed on this purchase and today.

So today if it works out even, $6 billion cash and equal ETC stock. Each Williams shareholder will get $8.01 in cash, and $14.08 in ETC common stock (at the 1.5274 ratio - as it is hooked to ETE stock value, and guaranteed for 2 years only). Meaning that the true value of this deal isn't $43.50 per share, it's really only $22.09 per share at the moment. Because it's a variable based on the value of ETE stock - that means the value of this deal is very dependent on oil prices. Declining revenues in ETE because of suppressed oil prices is where the majority of the risk of this merger is coming from. The spread comparison from $43.50 to me is misleading, and not a true representation of the current value of the deal.

http://www.streetinsider.com/Corporate+News/Energy+Transfer+Equity+(ETE),+Williams+(WMB)+Enter+$37.7B+Merger+Agreement/10923029.html

Under the terms of the transaction, Energy Transfer Corp LP ("ETC"), an affiliate of ETE, will acquire Williams at an implied current price of $43.50 per Williams share. Williams' stockholders will have the right to elect to receive as merger consideration either ETC common shares, which would be publicly traded on the NYSE under the symbol "ETC", and / or cash. Elections to receive ETC common shares and cash will be subject to proration. Cash elections will be prorated to the extent they exceed $6.05 billion in the aggregate and stock elections will be prorated to the extent the full $6.05 billion cash pool is not utilized. Williams stockholders electing to receive stock consideration will receive a fixed exchange ratio of 1.8716 ETC common shares for each share of WMB common stock, before giving effect to proration. If all Williams' stockholders elect to receive all cash or all stock, then each share of Williams common stock would receive $8.00 in cash and 1.5274 ETC common shares. In addition, WMB stockholders will be entitled to a special one-time dividend of $0.10 per WMB share to be paid immediately prior to the closing of the transaction. The special one-time dividend is in addition to the regularly scheduled WMB dividends to be paid before closing.

There is obviously the chance of some variation depending on how much cash people request, the exchange ratio of ETC could go up/down some from the 1.5274.

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.

Yes, Cannon Fodder has been wildly overstating the merger value.  nobody is getting $43.50/share upon the closing of the merger.

[LandArchPoke]

This was too good of a picture...