Williams Simplifies Corp Structure, Floats New Stock for $1.8B

Williams issued three press release on Monday that we’re still trying to figure out. Williams, like many other midstream (pipeline) companies has maintained a weird corporate structure whereby Williams the mother ship is a different corporate entity from Williams Partners, the main operating company. Once upon a time Williams had plans to merge the two together–but that all got mothballed when they ended up first fighting against, then trying to merge with Energy Transfer Equity (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B and Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). The deal eventually fell apart. Then Williams was briefly pursued by Enterprise Products Partners, interest which didn’t last long (see Drama: Enterprise Bails on Williams Merger, No Longer Interested). It seems that Williams has once again returned to the idea of tying the two corporate entities together more tightly. At least, that’s what we think is happening. The announcements begin by saying Williams is launching a plan to “simplify the structure” of the organization and remove the need for Williams Partners (stock ticker of WPZ) to “access public equity markets”–which means no further need to float new stock offerings. At the same time Williams the mother ship is floating 65 million shares of new stock at $29/share, hoping to raise a staggering $1.8 billion. Part of the “restructuring” means Williams Partners shareholders are about to get whacked with a much lower dividend payment. There’s a lot of moving parts here, so buckle up…

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