Williams Rebuffs Enterprise Merger Bid, Financial Times Says

Updated on
  • Pipeline giant is pivoting to future after failed ETE takeover
  • CEO Armstrong wants to execute vision after ‘stressful’ year

Williams Cos. recently rebuffed a takeover bid by pipeline rival Enterprise Products Partners LP, the Financial Times reported Thursday, citing people briefed on the negotiations.

Enterprise Products remains interested in a deal for Williams and may make another offer, according to the FT. Williams surged as much as 12 percent to $29.09 and was trading at $27.75 at 2:09 p.m. in New York. Enterprise Products initially rose before erasing gains to trade down 0.3 percent at $27.47.

Enterprise Products spokesman Rick Rainey declined by phone to comment. Williams spokesman Lance Latham declined by e-mail to comment.

News of Enterprise’s interest comes less than two months after Energy Transfer Equity LP walked away from its deal to buy Williams. Last year’s plunge in oil prices threw into question the economics of that merger, and Energy Transfer won a court case that allowed it to terminate its offer.

Williams’s future -- and CEO Alan Armstrong’s place in leading it -- has come under scrutiny since Dallas-based Energy Transfer terminated the takeover. Armstrong was opposed to the Energy Transfer merger last summer and said in an interview earlier this month that he’s excited to finally carry out his vision for the Tulsa, Oklahoma-based company after a "stressful" year.

“We have so much to do right now in terms of executing on all this big capital growth that we’ve got going on that that’s really where our focus is right now,” Armstrong said in the Aug. 1 interview.

That vision, he said, involves Williams continuing to build natural gas pipelines connecting supplies in remote shale formations to fast-growing markets. The company cut its dividend 69 percent earlier this month and said it would instead invest about $1.7 billion in its Williams Partners LP unit to help pay for “growth projects.”

Williams also announced the sale of its Canadian assets to Inter Pipeline Ltd. and is renegotiating contracts with drillers in Texas and Oklahoma in hopes of supporting their business.

(Updates shares in second paragraph.)
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