UPDATE 2-Hedge funds take Williams stake, ask for board seats

Mon Dec 16, 2013 6:35pm EST

NEW YORK Dec 16 (Reuters) - Two hedge funds together disclosed a nearly nine percent stake in Williams Cos Inc , saying that the U.S. pipeline and energy infrastructure company has made recent operational and financial missteps and should put two of the funds' executives on its board.

Corvex Management LP, a hedge fund run by Carl Icahn protege Keith Meister, and Soroban Capital Partners, run by former Goldman Sachs trader Eric Mandelblatt, disclosed their investment in a filing with U.S. regulators on Monday afternoon. They said the missteps had kept the company's shares from reaching their full value.

Shares of Williams rose more than 2 percent in post-closing trading after the funds announced their stake.

Shares of Williams closed up about 3 percent on Monday at $35.33. They are up around 12 percent over the last year, underperforming the Standard & Poor's 500 index, which is up around 26 percent over the same period.

Corvex and Soroban said they have had productive meetings and conversations with Williams' management and board, and that the recent missteps have prevented the company's shares from reaching their full value.

They said that they have proposed that Williams should immediately add Meister and Mandelblatt to its board.

Areas the investors said they might discuss with Williams include Williams' assets, its capital structure and dividend policy, and the potential for the company to do deals in the energy infrastructure sector.

Williams officials were not immediately available for comment. A spokesman for the funds said they would not comment beyond the filing.

The funds said that together they own more than 36 million of the company's shares - representing a roughly 5.3 percent stake in the company. They also have an economic interest in another 24 million of share equivalents.