Williams to evaluate sale before merger vote

(Photographer: Daniel Acker/Bloomberg)
(Photographer: Daniel Acker/Bloomberg)

HOUSTON — The Williams Cos. said Wednesday it wouldn’t hold a shareholder vote on its proposed $13.8 billion consolidation until after the company finishes evaluating a potential sale.

Tulsa, Oklahoma-based Williams, a major U.S. pipeline company, proposed the merger of its several subsidiaries last May in a push to boost growth. In June, those plans were derailed when Williams announced it had received and rejected an unsolicited buyout offer from pipeline rival Energy Transfer Partners.

Energy Transfer’s offer is contingent on Williams abandoning its merger, and Williams has since retained investment bankers and said it is considering its options, including a sale. Williams had not set an official date for a shareholder vote.

The public back-and-forth between the two companies has put Williams’ proposed merger under the microscope, as Williams’ management has sought to assure investors that the company’s plan is solid while Energy Transfer has said its deal is the best path forward.

Energy Transfer’s all-stock offer valued Williams at $64 a share, or about a 32 percent premium to Williams shares before the announcement. Shares of the Williams Cos. Inc. traded up 85 cents or 1.60 percent on Wednesday to $53.96 per share.

Williams Partners, an asset-holding subsidiary of Williams Cos. Inc., said Wednesday its second-quarter net income grew to $300 million compared to $221 million in the same period last year.

The master limited partnership reported a distributable cash flow of $701 million compared with $504 million in DCF attributable to partnership operations in second quarter 2014. That left the company just short of covering the $723 million in cash it paid out to investors.

Williams will hold a conference call discussing the second quarter tomorrow.