Close on the heels of announcing a $6.0 billion acquisition,
Williams Companies Inc.
) disclosed plans of a $3.0-billion worth share offering to the
public for part sponsorship of the buyout. The acquisition entails
the North American energy firm's remaining 50% general partner (GP)
interest and 55.1 million limited partner (LP) units in
Access Midstream Partners LP
Williams Companies added that as per the conditions of the
issuance, the underwriters can buy up to 450.0 million extra shares
within a period of one month to cover over allotments, if any.
Williams Companies recently declared 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 will also
merge the energy infrastructure provider,
Williams Partners LP
) with Access Midstream. Post acquisition, Williams Companies will
hike its third quarter dividend 32.0% sequentially to 56 cents per
share. This gave investors reason to cheer the news, and the stock
surged 18.7% on NYSE.
Tulsa, OK-based Williams Companies is a premier energy
infrastructure provider in North America. But we are concerned with
the company's extensive natural gas exposure, which raises its
sensitivity to the volatile commodity's price.
Williams Companies currently retains 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 look at better-ranked players in the same
Atlas Energy LP
). This stock sports a Zacks Rank #1 (Strong Buy).
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WILLIAMS COS (WMB): Free Stock Analysis Report
WILLIAMS PTNRS (WPZ): Free Stock Analysis
ATLAS ENERGY LP (ATLS): Free Stock Analysis
ACCESS MIDSTRM (ACMP): Free Stock Analysis
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