Williams in talks to pay $2.3 b in cash, stock for Barrett Resources

Washington

WILLIAMS Cos is in advanced discussions to buy Barrett Resources Corp for at least $2.3 billion in cash and stock, topping a hostile $2 billion cash bid from Shell Oil Co, according to people familiar with the matter.

The two companies were holding talks over the weekend, and it wasn’t clear if and when they would reach agreement. Furthermore, it wasn’t clear what move, if any, Shell might make to counter a Barrett-Williams deal. Shell, a unit of Anglo-Dutch titan Royal Dutch/Shell Group, has deep pockets, but has vowed not to overpay for acquisitions. Shell sweetened its original bid but chose not to participate in the formal bidding after it put Barrett “in play,” presumably because it would have had to drop its hostile offer. The proposed Williams bid values Barrett in the low $70s per share, a sizable premium to Shell’s $60 a share cash offer, the people said. Indeed, shares of Barrett have been rising steadily on views that a successful bidder would likely pay at least $70 a share for Barrett. At 4 pm Friday, Barrett was up 65 cents to $67.30 in New York Stock Exchange composite trading. While Shell has much deeper pockets, Williams’ stock is an attractive currency with which to do deals, takeover traders say. But some of the Williams bid premium could evaporate if its stock falls in reaction to news of the Barrett talks. The amount of stock and cash in the offer couldn’t immediately be determined.

-- The Wall Street Journal