Williams Cos. (WMB) Comments on Corvex Statement; Intends to Appoint Three Independent Directors

August 22, 2016 2:04 PM EDT

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The Williams Companies, Inc. (NYSE: WMB), in response to comments from Keith Meister of Corvex Management LP (“Corvex”) that Corvex intends to nominate 10 of its employees to stand for election to the Company’s Board of Directors at the 2016 Annual Meeting of Stockholders, issued the following statement:

Given the events of the last year, it is unfortunate that Corvex intends to launch a distracting and costly proxy contest while Williams is moving forward with its plan to identify new, highly qualified and independent directors.

The Williams Board maintains open communications with stockholders, welcomes their input and perspective, and is committed to acting in their best interests. In that regard, after discussions with Corvex and other Williams stockholders, Williams intends to appoint three new, independent directors to its Board of Directors prior to the Company’s 2016 Annual Meeting. The Board’s comprehensive process to identify additional highly qualified directors is underway, and Williams expects to announce new Board appointments in the coming weeks. Williams is committed to the highest standards of corporate governance and to maintaining a world-class Board that comprises directors with appropriate expertise, experience and skills.

The Board believes that it is important that the new directors who will be appointed in the coming weeks participate in Board discussions regarding the composition of the Board going forward. The Board reached out to Mr. Meister regarding the Corvex proposal and indicated that including the new directors in Board deliberations would allow the Board to take immediate advantage of the expertise, experience and insight of the new directors. Therefore, the Board indicated it would promptly make a determination on the Corvex proposal once the new Board members are appointed.

Notably, since early July, the Williams management team has announced a series of actions, including its strategic plan, and the Company’s stock has increased in value by approximately 35%.

  • 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. The Williams Board and management team will continue to take decisive actions to position Williams for the future. Williams remains committed to enhancing stockholder value, maintaining superior service for its customers and ensuring a safe working environment.

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