Williams Advances After Icahn Protege Seeks Seat on Board

Dec 17, 2013 4:16 pm ET

(Updates with closing share price in fifth paragraph.)

Dec. 17 (Bloomberg) -- Williams Cos., the U.S. pipeline operator that’s underperformed its peers this year, climbed after becoming the latest energy company to be targeted by activist investors.

Williams rose the most since August today after Corvex Management LP, founded by Carl Icahn protege Keith Meister, and Soroban Master Fund LP said in a filing yesterday that they had amassed a collective 8.82 percent interest. The hedge funds, now the largest shareholder of Williams, are pressing for changes.

Energy companies from Transocean Ltd. to Talisman Energy Inc. have been challenged by activist shareholders this year who believe they have failed to realize the value of reserves. Meister and Soroban’s Eric Mandelblatt, the former co-chief executive officer of TPG-Axon Capital Management LP, are seeking board seats at Williams.

“Their appointment would materially enhance shareholder ownership on the board,” according to the filing that came after the close of regular trading. “The shares are substantially undervalued and are an attractive investment.”

Williams rose 4.3 percent to $36.84 at the close in New York. Before today, the stock had climbed 8 percent this year, in contrast to an 18 percent gain for the Standard & Poor’s 500 Energy Index.

Williams said in a statement that it has had an “ongoing dialogue” with its shareholders, including Corvex and Soroban. “We look forward to continuing these discussions as we execute on our long-term plan,” the Tulsa, Oklahoma-based company said.

In the filing, Corvex and Soroban said they plan to hold talks with management about the “potential for participating in strategic combinations given the rapid pace of consolidation in the midstream energy industry” as well as dividends and capital projects.

Meister stepped down in 2010 as vice chairman of Icahn Enterprises LP.

--Editors: Stephen Cunningham, Jasmina Kelemen