Williams Cos Inc‘s Canadian unit has attracted at least seven bidders, including Enbridge Inc and Pembina Pipeline Corp, that could pay the U.S. pipeline company up to US$2 billion, people familiar with the situation said.
Tulsa, Oklahoma-based Williams, whose deal with Energy Transfer Equity fell through last month, is working with Barclays Plc and Toronto Dominion Bank on the sale, the sources said.
Interest has come from pipeline companies Enbridge, Pembina, Keyera Corp and Inter Pipeline Ltd, said the sources, who spoke on condition of anonymity because the process is private.
Pension funds including the Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan and the Ontario Municipal Employees Retirement System (OMERS), as well as U.S. companies, also expressed interest, the sources said.
Enbridge, Pembina, Keyera, Inter Pipeline, CPPIB and TD Securities declined to comment. Williams, Teachers, OMERS and Barclays did not respond to requests for comment.
The Canadian unit could fetch more than US$1 billion and as much as US$2 billion, the sources said. The sale process for Williams Canada is at an advanced stage, and a deal could happen by the end of the month, they said.
It is still not clear whether the buyers will be able to match the company’s price expectations, one source said.
After the Reuters report, shares of Williams jumped nearly 4 percentage points higher. They traded up as much as 6.3 percent and were 5.3 percent higher at US$23.40 at 3.20 pm EST on Thursday.
Earlier this month, Williams’ board stood by Chief Executive Officer Alan Armstrong and named a new chairman after six directors resigned following a failed attempt to unseat him.
With operations in Fort McMurray as well as Sturgeon County near Edmonton, Williams has invested more than US$2 billion in Canada. In an undated video on its website, the company says it could invest up to US$2.8 billion in new Canadian projects.
Interest from buyers has been robust, the sources said, highlighting demand for midstream assets that offer a steady cash flow despite volatility in the price of oil. Midstream companies are involved in the processing and transportation of oil and gas.
The two-year slump in oil prices has hurt the Canadian energy industry, weighing on production plans, driving down share prices and triggering a range of cost-cutting measures.
CPPIB teamed up with Wolf Infrastructure Inc last year to create an investment vehicle focusing on energy infrastructure assets.
By John Tilak
(Additional reporting by Matt Scuffham in Toronto, Nia Williams in Calgary, Mike Stone in New York; Editing by Lisa Von Ahn and Andrew Hay)
Photo courtesy of The Williams Companies Inc