Williams (WMB) today announced that its Board of Directors has authorized a process to explore a range of strategic alternatives following receipt of an unsolicited proposal to acquire Williams in an all-equity transaction at a stated per share price of $64.00. The unsolicited proposal was contingent on the termination of Williams’ pending acquisition of Williams Partners L.P. (WPZ). With the assistance of its outside financial and legal advisors, the Williams Board carefully considered the unsolicited proposal and determined that it significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis and through other growth initiatives, including the pending acquisition of WPZ.
As previously announced on May 13, 2015, Williams and WPZ have signed a definitive agreement under which Williams will acquire all of the public outstanding common units of WPZ in an all stock-for-unit transaction at a 1.115 ratio of Williams common shares per unit of WPZ. During its strategic review process, Williams will continue to work towards the completion of the WPZ transaction.
Williams has retained Barclays and Lazard to assist in its review of strategic alternatives, which could include, among other things, a merger, a sale of Williams or continuing to pursue the Company’s existing operating and growth plan.
“Our Board and management team remain committed to acting in the best interests of shareholders, and in light of the unsolicited proposal, our Board believes it is in the best interest of shareholders to conduct a thorough evaluation of strategic alternatives,” said Alan Armstrong, President and Chief Executive Officer of Williams. “Williams’ premier infrastructure connects the best natural gas supplies to the best markets, and our strategy has provided substantial shareholder value allowing us to deliver a compound annual dividend growth rate of approximately 30% since we embarked on our strategy in 2012. In addition, we expect the growth of our business and the benefits from the WPZ transaction to enable 10-15% dividend growth through 2020. We are confident in our strategic plan and the significant value that will be created through the acquisition of WPZ and our large portfolio of growth projects. At the same time, we are open minded and committed to ensuring that Williams is maximizing value for shareholders.”
There can be no assurance regarding the results of Williams’ review of strategic alternatives. Williams undertakes no obligation to make any further announcements regarding the exploration of strategic alternatives unless and until final decisions are made.
Barclays and Lazard are serving as financial advisors to Williams. Cravath, Swaine & Moore LLP and Gibson, Dunn & Crutcher LLP are serving as legal advisors to Williams.
Williams (WMB) is a premier provider of large-scale infrastructure to connect North American natural gas and natural gas products to growing demand for cleaner fuel and feedstocks. Headquartered in Tulsa, Okla., Williams owns approximately 60 percent of Williams Partners L.P. (WPZ), including all of the 2 percent general-partner interest. Williams Partners is an industry-leading, large-cap master limited partnership with operations across the natural gas value chain from gathering, processing and interstate transportation of natural gas and natural gas liquids to petchem production of ethylene, propylene and other olefins. With major positions in top U.S. supply basins and also in Canada, Williams Partners owns and operates more than 33,000 miles of pipelines system wide – including the nation’s largest volume and fastest growing pipeline – providing natural gas for clean-power generation, heating and industrial use. Williams Partners’ operations touch approximately 30 percent of U.S. natural gas. www.williams.com