Energy giant Williams Companies has reportedly rejected a $48 billion buyout bid from Texas-based Energy Transfer Equity, while the possibility of a buyout remains open as it will consider other offers.
Representatives of the company told the media on Monday that it had received a buyout bid calculated at $64 per share – 33 percent more than the price of its shares on Friday evening- worth an estimated total of $48 billion. Despite the fact that they did not disclose the identity of the bidder, later reports pointed towards it being Dallas natural gas storage and transportation giant Energy Transfer Equity.
They also said that the bid was rejected after being carefully considered, with the board thinking it doesn’t reflect the current and potential value of Williams Companies and of its future acquisition Williams Partners. The latter is a subsidiary of Williams Companies, who plans to absorb it in a nearly $14 billion deal.
The price of Williams shares closed on Friday at $48.34 each, rising with 7.8 percent since the start of the year. The deal which would see William Partners absorb into the main company is expected to finalize in this year’s third financial quarter, with resulting mega-company being projected to value at about $84 billion.
Energy Transfer Equity has confirmed the bid on Monday morning and claimed that it had made multiple offers and even more attempts to enter negotiations with Williams’ board regarding a potential buyout. News of the bid made Williams Cos shares grow by over 26 percent during premarket trading, reaching $61.01 on Monday morning.
Stock rating and market analysis companyTheStreet Ratings Teams has pointed out that Williams is one of the fastest growing energy companies around, with its cash flow increasing by 50% compared to the same quarter of 2014 and a similarly increased return on equity since last year. This shows the company strength when its mostly poor revenue is taken into consideration, with the company posting less earnings per share than in 2014. Overall revenues have slightly dropped by 1.9 percent as well, maintaining the company though over the industry average.
Image Source: photohome
