Williams Companies Prices $1.9B Notes to Fund Acquisition - Analyst Blog

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Soon after announcing a 53 million share offering to fund its recent acquisition, Williams Companies Inc. ( WMB ) has declared pricing of $1.9 billion senior notes for the same.

The North American energy firm announced a two-part offering. The first part comprises a $1.25 billion offering of 10-year notes, priced at 99.738% of par and carrying an interest rate of 4.55%. The second offering of $650 million 30-year notes is priced at 99.773% of par and carries an interest of 5.75%. Williams Companies anticipates these offerings to close on Jun 24.

The company plans to use the net proceeds from the offering to fund a part of its recently announced $6 billion acquisition of the 50% general partner (GP) interest and 55.1 million limited partner (LP) units in Access Midstream Partners LP ( ACMP ).  

On Jun 15, Williams Companies announced that it would increase the GP and LP interests in Access Midstream - a master limited partnership (MLP) engaged in the midstream business - to 100% and 50%, respectively, by the third quarter. Williams Companies also stated that it intends to merge the energy infrastructure provider, Williams Partners LP ( WPZ ) with Access Midstream.

Furthermore, Williams Companies mentioned that the benefits from the acquisition would be reflected in its third-quarter dividend, which is expected to increase 32.0% to 56 cents per share. Notably, the stock has gained nearly 24% since the acquisition.

Tulsa, OK-based Williams Companies is a premier energy infrastructure provider in North America. At present, Williams Companies carries a Zacks Rank #3 (Hold), which implies that it is expected to perform in line with the broader U.S. market in the next one to three months.

Meanwhile, one can consider a better-ranked player from the same industry such as Holly Energy Partners L.P ( HEP ) that sports a Zacks Rank #1 (Strong Buy).


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WILLIAMS COS (WMB): Free Stock Analysis Report

WILLIAMS PTNRS (WPZ): Free Stock Analysis Report

ACCESS MIDSTRM (ACMP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: MLP , WMB , WPZ , ACMP , HEP

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