Williams: Proxy Firm ISS Recommends Holders Approve Merger With ETE

   By Tess Stynes 
 

Williams Cos. (WMB) said proxy advisory firm Institutional Shareholder Services is recommending that the pipeline giant's shareholders vote in favor of the company's pending acquisition by rival Energy Transfer Equity LP (ETE) despite pressures from low commodities prices.

The Tulsa, Okla., company's shareholders are set to vote on the troubled merger deal--valued around $33 billion when it was announced--on June 27.

Williams said that in its recommendation ISS noted items such as the significant cash component of the deal, the combined company's more diversified customer base and an opportunity for shareholder to have a nearly 50% equity stake in a merged company that is expected to have much stronger cash flow than Williams would on its own.

In a letter urging its shareholders to support the deal, Williams also noted the merger would lead to "significant synergies" while also reiterating that Williams' dividend could be cut if the pending deal isn't completed. Williams said that in a standalone scenario that efforts to improve its balance sheet also would likely include further capital spending cuts, asset sales and equity issuance.

Energy Transfer has been aiming to restructure or escape the planned acquisition in the wake of low commodities prices that have spread pain through the energy sector. The two pipeline companies have been in a legal tussle as Williams seeks to undo a convertible share issue by Energy Transfer to help fund the deal and force Energy Transfer to proceed with their merger agreement.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

June 15, 2016 11:17 ET (15:17 GMT)

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