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Will Williams' (WMB) Board be replaced by Corvex's Meister?

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Oklahoma-based pipeline company Williams Companies, Inc. (WMB - Free Report) , which recently lost a court battle to preserve a takeover from another pipeline operator Energy Transfer Equity L.P. , is facing a new trouble as the former director of the company has announced plans to overhaul the entire board of the company.

Keith Meister, the managing partner of Corvex Management that holds a 4.1% stake in Williams, intends to nominate 10 employees of his own hedge fund as placeholders. In this proxy battle launched against Williams, these employees will serve as placeholders for the Thursday, Aug 25th deadline of nominating new directors and the permanent independent directors will be presented by Corvex to the shareholders in November.

The reason behind Meister launching the proxy battle was the rejection of the proposal to nominate a majority of seven independent directors to the board by Williams. Also, Meister and the other directors lost confidence in the company when it was unable to close a deal to be acquired by Energy Transfer Equity. In addition, Williams missed financial expectations, saw growth projects fail and had a poor safety history over the last five years.

WILLIAMS COS Price

 

Following the deal cancellation with Energy Transfer Equity, Williams has been making investments of more than $1.5 billion in its master limited partnership. Also, the company has been taking steps to reduce its debt load by divesting its assets.

Tulsa, OK-based Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing and transportation of natural gas. The company boasts a widespread pipeline system and is one of the largest domestic transporters of natural gas by volume.

Recently, Williams Companies reported decent second-quarter 2016 earnings on the back of significant cost reductions and continued improvement in financial performance. The company reported adjusted earnings from continuing operations of 19 cents per share, in line with the Zacks Consensus Estimate. Moreover, the bottom line improved from the prior-year figure of 15 cents per share.

Presently, Williams Companies carries a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy sector include Enbridge Energy Partners, L.P. and China Petroleum & Chemical Corp. . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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