Less than one week before shareholders of Tulsa’s Williams Cos. decide on a controversial merger with Energy Transfer Equity of Dallas, Williams says three out of four of the leading proxy advisory firms recommend they vote for the proposed transaction.
In a filing with the Securities and Exchange Commission, the company said the three are Institutional Shareholder Services, Egan-Jones Proxy Services and Pensions & Investment Research Consultants Limited. The company said it also believes Glass, Lewis & Co. reached the wrong conclusion in recommending against the deal.
The Glass Lewis recommendation fails to reflect the potential upside in the transaction, the value certainty provided by the cash component and the risks associated with a standalone Williams, stated the filing. It also said Glass Lewis ignores the significant acquisition premium being offered to the stockholders. The company also said Glass Lewis mistakenly cites a revised aggregate pre-tax annual corporate synergy total of $126 million in the base case.
Leaders of Williams say if the deal is not allowed, it will put the company at risk.
“While Williams is focused on continuing to improve its credit profile, current leverage metrics are higher than its targeted level and there is risk for a credit rating downgrade if the merger is not completed,” stated the company. It also said Williams would also continue to face significant customer concentration risk, notably Chesapeake accounted for 18% of Williams’ 2015 revenues.
The company said it might have to supplement debt reduction plans and expects the elimination or significant reduction of the company dividend.