Last week we witnessed Williams Company (a large player in the natural gas industry) turn down a hug buyout from Energy Transfer Equity that was worth approximately $48 billion. This is quite a large offer to turn down, but executives at Williams stated that they felt it “significantly undervalued” their company.
Could they be right? Is Williams truly worth more than $48 billion? Here are some of the facts-William’s stock has been solid this year up around 7.8% and they are not effected by the roll coaster of oil prices because they of their long term contracts (resulting in a relatively fixed fee). These factors point to Williams worth and value going up but determining for how long is hard. Only time will tell us who made the smart decision here. An interesting article from the Wall Street Journal goes into more detail about this rejected buyout (linked here).
In my opinion this buyout should have taken place and it would have benefited both parties involved. Although the future is unclear and the energy market is so volatile, Energy Transfer would have gained more pipeline in key geographic regions and Williams would have received a good sum for what they have. However, I do believe that Energy Transfer will try to come back with a larger bid.
What do you think? Is William Company worth $48 billion? Will they continue to see success or have they plateaued? Should Energy Transfer Equity come back with a larger offer? Please leave us your comments!