Boston, MA 06/18/2014 (wallstreetpr) – Williams Companies, Inc. (NYSE:WMB) intends to raise $3 billion and an additional $450 million in the case of over allotment on the side of the underwriters.
The company is offering 53 million shares priced at $57 per piece. Underwriters have an option to acquire additional 7.95 million shares by taking advantage of the 30-day period allowed to cover over allotment in the offering.
The offering comes hot on the heels of a deal between Williams Company and Access Midstream Partners LP (NYSE:ACMP). The proceeds from the just announced shares offering will be used to meet part of the Access (NYSE:ACMP) acquisition cost.
Williams Companies agreed to sink $6 billion to acquire all of the general partner stake in Access Midstream and 50 percent stake of the company’s limited partnership units. Williams (WMB) already owns a significant stake in Access Midstream, and the latest acquisition will involve adding to its portfolio the general partnership stake that it does not already own.
The end game in the acquisition is that Williams Companies, Inc. (NYSE:WMB) intends to combine its limited partnership business known as Williams Partners LP (WPL) with Access Midstream in what could easily create a powerhouse in the midstream operations in the U.S.
Lingering concerns
Although Williams Companies, Inc. (NYSE:WMB) appears to be making exciting moves, some analysts are concerned over the company’s extensive exposure to natural gas bearing in mind the price volatility of the commodity. The company is a major provider of pipeline services while its target is natural gas services company that is active in several shale gas formations.
Big promise
Inasmuch as there might be some concerns about the company’s exposure to natural gas, the company believes that its moves are intended to position the business on solid, profitable grounds and price volatility may not be a major headache. The company anticipates that its anticipated major master limited partnership will have EBITDA of $5 billion in 2015 if all goes well.
The company promised to hike its quarterly dividend by 32 percent sequentially so that shareholders can be awarded $0.56 per share in 3Q. The dividend improvement will be implemented after the closing of the deal with Access Midstream. The dividend promised excited shareholders.
