Williams Cos. Inc. (WMB)

[eastunder]

Energy Transfer may have to sweeten the $53B pot to buy The Williams Companies

http://www.bizjournals.com/dallas/news/2015/06/24/energy-transfer-may-have-to-sweeten-the-53-pot-to.html?ana=yahoo

Jun 24, 2015,


Kelcy Warren, chairman of Energy Transfer Equity, made a $53 billion offer for The Williams Companies that was publicly rejected.


Kelcy Warren, chairman of Energy Transfer Equity, made a $53 billion offer for The… more

Energy Transfer Equity will likely have to increase its $53.1 billion offer for The Williams Companies if it wants the deal to happen, Darren Horowitz, an analyst for Raymond James, wrote this week.

Dallas-based Energy Transfer (NYSE: ETE) originally offered $64 a share for Tulsa, Oklahoma-based Williams (NYSE: WMB). Williams rejected the offer.

Assuming $200 million in synergies in 2016, Horowitz suggests upping the deal to $74 a share.


“While this doesn’t necessarily mean we believe ETE will offer $74/share, there appears to be ample room for ETE/WMB to work out a deal,” Horowitz said in his report. “Stay tuned.”

This means there will be consolidation — duplicate jobs could be cut — if this deal happens, just as there was when Energy Transfer Partners (NYSE: ETP) merged with Regency Energy Partners earlier this year. That $18 billion deal was expected to net $160 to $225 million in savings.

That implies that the $200 million in savings for the Williams deal could be conservative, Horowitz said. Williams employs about 1,000 people in Tulsa and has its headquarters in the BOK Tower, the tallest building in downtown.

Williams has ties to Dallas midstream, including the $2.5 billion purchase of Caiman Eastern Midstream in 2012.