North American energy firm, Williams Companies Inc. ( WMB ) has declared the pricing of 53 million shares of the company at $57.00 a piece. Moreover, it stated that the underwriters would be given a 30-day period to buy an additional 7.95 million shares.
This means that the company would garner around $3 billion from the offering and an extra $450 million if the underwriters make the additional purchase.
Williams Companies intends to use the net proceeds from the offering to finance 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 price rose nearly 22% over the past one week, following these positive statements.
Tulsa, OK-based Williams Companies is a premier energy infrastructure provider in North America. Despite the above-mentioned positives, we remain concerned about the company's considerable natural gas exposure, which increases its sensitivity to the commodity's price, which continues to be volatile.
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).