Williams offers stock, cash in exchange for Feline PACS

New York, Sept. 17 - Williams Cos. Inc. said it has begun an exchange offer in which it is offering stock and cash for its Feline PACS in the form of Income PACS.

The transaction is designed to reduce overall debt, the Tulsa, Okla., natural gas and wholesale power company said.

The exchange covers up to 43.9 million of the 44 million PACS outstanding. Williams issued the securities in January 2002, raising $1.1 billion.

Williams is offering one share of common stock plus $1.47 in cash for each PAC.

The PACS closed at $13.34 on Sept. 16 while Williams' stock closed at $12.05.

Under the terms, the PACS exchange on Feb. 16, 2005 into one share of Williams stock, assuming the stock is at $41.25 or less.

Williams noted that the $1.47 cash payment is more than the remaining interest payments on the PACS.

The exchange runs through 5 p.m. ET on Oct. 18.

Merrill Lynch, Pierce, Fenner & Smith Inc. (888 654-8637) is lead dealer manager for the offer. Citigroup Global Markets Inc. and Banc of America Securities LLC are co-dealer managers. D.F. King & Co. Inc. (800 848-2998) is the information agent. JPMorgan Chase Bank is the exchange agent for the offer.

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