The two activist hedge funds looking to spur change at the Williams Companies disclosed on Friday that they have raised their collective stake in the gas pipeline company and have hired an investment banker to aid them in their campaign.
The firms, Corvex Management and Soroban Capital Partners, said in a regulatory filing that they have increased their economic interest in Williams to just under 10 percent of the company’s value, up from an initial 5.3 percent.
In a small but interesting development, the hedge funds said that the vast majority of their holdings, comprising 8.8 percent of the company, are in actual shares. It’s likely that the firms will use that to argue that they have significantly more money at stake â€" some $2.5 billion worth â€" than if their position was composed largely of derivatives that give them an economic interest in the equivalent amount of stock.
Moreover, the two said that they have hired Moelis & Company to advise them on their options.
Since going public with their stake in December, Corvex and Soroban have suggested that they want Williams to consider pursuing more mergers. The hedge funds have also suggested that they are seeking seats on the pipeline operator’s board.
Corvex, which is run by a protégé of the billionaire Carl C. Icahn, has been busy with a number of activist campaigns. Besides Williams, it has also made targets of CommonWealth REIT, a real estate investment trust, and Hertz Global Holdings, the rental car company.
Soroban was founded by several former executives of the hedge fund TPG-Axon, and its investments have included energy companies like Plains GP Holdings and SemGroup.
