Williams Cos. (WMB) Affirms Receipt of Corvex Board Nominations; Issues Statement

August 24, 2016 11:12 AM EDT

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The Williams Companies, Inc. (NYSE: WMB) confirmed that Corvex Management LP (“Corvex”) has nominated ten Corvex employees, including Keith Meister, to stand for election to the Company’s Board of Directors (the “Board”) at the 2016 Annual Meeting of Stockholders to be held on Wednesday, November 23, 2016.

The Company issued the following statement:

Williams is disappointed that Corvex has launched a distracting and costly proxy contest while Williams is successfully executing its strategic plan and moving forward with its intent to name three new, highly qualified and independent directors as part of its ongoing commitment to maintaining a world-class board of directors.

The Williams Board intends to carefully review Corvex’s nomination notice. No stockholder action is required at this time. Without taking a position on the Corvex 14a-8 shareholder proposal and the Corvex nomination, Williams notes that, should Corvex identify individuals with appropriate expertise, experience and skills who are qualified to serve on the Board, Williams will work constructively with Corvex and seriously consider such candidates for appointment to the Board.

Williams notes that it has taken steps to allow stockholders to submit nominations in compliance with Williams’ bylaws, including extending the nomination deadline to August 25, 2016 and making a clear indication to stockholders of the number of Board seats that would be available. In addition, the Williams Board has stated that it will consider any potential nominees that stockholders feel would be appropriate to join the Board.

Importantly, Williams contacted the directors who resigned from its Board on July 1, 2016, including Keith Meister of Corvex, in connection with its search for new, highly-qualified directors in order to request their input regarding particular areas of expertise or experience to prioritize in its director search. Williams also asked the former directors to suggest specific director candidates.

Since early July, the Williams management team has announced a series of strategic actions, and the Company’s stock has increased in value by approximately 39%.

  • Williams and Williams Partners announced immediate measures designed to enhance their values, strengthen their credit profile and fund the development of a significant portfolio of fee-based growth projects at Williams Partners, while maintaining flexibility as financial and operational plans are being reviewed.
  • Williams Partners expects to implement a Distribution Reinvestment Program (DRIP); Williams intends to reinvest approximately $1.7 billion into Williams Partners through 2017, funded by reduced quarterly cash dividends.
  • Williams Partners announced that it has conditionally committed to execute a new gas gathering agreement with a new producer customer, a private company successor to Chesapeake Energy (NYSE: CHK), in the Barnett Shale. Additionally, Williams Partners and Chesapeake agreed to a revised contract in the Mid-Continent region. Among other benefits, this is expected to reduce customer concentration risk and result in additional drilling and volumes in the basins.
  • Williams and Williams Partners announced that they have agreed to sell the companies’ Canadian businesses to Inter Pipeline Ltd. for combined cash proceeds of $1.35 billion CAD.
  • Williams’ cost reduction initiatives to address the realities of slower growth in key supply areas are on-track, with $55 million in lower adjusted costs for the second quarter of 2016 versus the prior year period despite additional assets being in service.
  • Williams and Williams Partners disclosed a 2017 $3.1 billion growth capital program, approximately three-quarters of which relates to Transco expansions in high growth demand markets under long-term contracts.

While the Company does not comment on M&A rumors, the Williams Board is open minded and evaluates all potentially value enhancing strategic opportunities. Williams has a longstanding policy of open communications with its stockholders. The Williams Board and management team will continue to take decisive actions to position Williams for the future and enhance stockholder value.

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