The Williams Companies, Inc.
Robbins Arroyo LLP: Merger of The Williams Companies, Inc. (WMB) With Energy Transfer Equity, L.P. (ETE) May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the proposed merger of The Williams Companies, Inc. (NYSE: WMB) with Energy Transfer Equity, L.P. (NYSE: ETE). On September 28, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which ETE will merge with Williams. Under the terms of the agreement, Williams shareholders will receive $43.50 in cash or 1.8716 shares of Energy Transfer Corp. L.P., an affiliate of ETE, for each share of Williams common stock, or a combination of both.
Is the Proposed Acquisition Best for Williams and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Williams is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, Williams rejected a previous – and substantially better – offer by ETE on June 21, 2015, in which Williams shareholders would have received $64.00 worth of Energy Transfer Corp. stock, representing a 32.4% one-day premium based off Williams’s closing price of June 19, 2015. The Williams Board rejected the proposal believing it significantly undervalued the company.
This new merger consideration now represents a discount of 12.4% based on Williams’s average one month closing price prior to ETE’s initial proposal of June 21, 2015. This premium is significantly below the average one month premium of nearly 27% for comparable transactions within the past three years. Further, the $43.50 merger consideration is significantly below the target prices set by ten analysts before the proposed transaction was announced, including $65.00 set by analysts at JP Morgan and Credit Suisse on June 2, 2015 and May 13, 2015, respectively, and $63.00 set by analysts at Argus Research Corp. and UBS on May 15, 2015 and May 14, 2015, respectively. In the last three years, Williams traded as high as $59.77 on September 2, 2014, and most recently traded above the merger consideration – at $49.05 – on June 19, 2015.
Williams shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Williams shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.