This morning, Williams Companies (NYSE: WMB) announced it would acquire Williams Partners (NYSE: WPZ), the natural-gas company that has been in our portfolio since 2010.
On the news, both stocks soared. Williams Partners, which we hold, jumped 22% — and is now up more than 50% in our portfolio.
Under terms of the deal, every share of Williams Partners will become 1.115 shares of Williams Companies — equating to an 18% premium based on yesterday’s closing prices.
Any fractional shares will be paid in cash.
The question is: Do we keep Williams Companies when those shares drop into our accounts?
I do not have an immediate answer because I haven’t looked at that company. But I will … and I will get back to you soon on what my research uncovers. Maybe we keep the shares, maybe we sell them and reserve the profits for a later trade.
Either way, I’ll send you the updated recommendation in your June issue of Sovereign Investor, so stay tuned.
Until next time, stay Sovereign…
Jeff D. Opdyke
Editor, Sovereign Investor