By Albert Alfonso
Earlier this month came the rather shocking news that six members of Williams’ (NYSE:WMB) board of directors had resigned. . . .
Reading over some of the resignation letters, you can tell that this was a deeply divided board. There was wide disagreement as to if Alan Armstrong should remain as CEO. Six directors, including the chairman of the board, resigned after the other members did not go along with changing the CEO.
Keep in mind that these departing directors were in favor of the failed ETE merger. I think it is safe to assume that if they would have won the battle over the CEO position that WMB may have been put back on the block.
However, the stage is also set for a proxy fight, according to the WSJ. Two of the departing board members, Keith Meister and Eric Mandelblatt, who collectively control 8.4% of WMB, both indicated that they would not sell their positions. This may lead to an attempt to axe the entire board. I do not think this will be the last time we hear from them.
Williams is going it alone, though a dividend cut is likely
With Mr. Armstrong staying on as CEO, this means that WMB will stay independent. In other words, the failed coup means that the company will stay focused on running its midstream operations and not go out looking to make a deal. This should provide some much-needed stability and boost the value of this undervalued stock.
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