By David Benoit and Alison Sider 

Activist investor Keith Meister is seeking to remove the entire board of Williams Cos. this fall, prolonging the drama that has already gripped the pipeline company for a year.

The move comes just two months after Mr. Meister and five other directors quit Williams's board and ahead of a Thursday deadline to nominate new directors, leaving him scrambling for names. Mr. Meister plans to nominate 10 employees of his own hedge fund, Corvex Management LP, as placeholders, he told CNBC.

In the coming weeks, Corvex will seek nominees, including from other investors, and plans to identify a new board before shareholders vote in November. The Corvex employees, unlikely to be very appealing as a board on their own, would resign their first day and appoint the identified board, of a size yet to be determined. Corvex owns a 4.1% stake in Williams.

Mr. Meister's announcement sets the company up for another three months of conflict leading up to its Nov. 23 annual meeting, as Williams looks to shake off the effects of a failed merger with Energy Transfer Equity LP. Williams has slashed its dividend and sold assets in Canada in recent weeks.

"Given the events of the last year, it is unfortunate that Corvex intends to launch a distracting and costly proxy contest while Williams is moving forward with its plan to identify new, highly qualified and independent directors," Williams said in a statement. The company cited the steps it has taken to boost the stock and its recent stock gains.

The activist investor doesn't plan to serve on the new board himself, he said in an interview with The Wall Street Journal. He signaled he would be willing to consider the three directors Williams has said it would add but hasn't yet named, depending on their qualifications.

Mr. Meister said the fight would be to get a board that is accountable to shareholders and not Chief Executive Alan Armstrong.

"In my opinion, the principal qualification the six independent directors currently on the Williams board have is their complete support of Alan Armstrong," Mr. Meister said.

Williams announced last week it would launch a search for three new independent directors to add to the seven directors that remained after a dramatic board shake-up this summer following a failed effort to oust Mr. Armstrong and the collapse of the Energy Transfer deal.

The merger fell apart amid a protracted legal battle over tax issues surrounding the combination. Mr. Meister and another activist investor, Eric Mandelblatt of Soroban Capital Partners, were in favor of the merger from the start, while Mr. Armstrong voted against it.

After the deal was called off, a contingent of Williams's board, including the activists, fought to force Mr. Armstrong out in order to bring in a new CEO. Half a dozen directors quit when that effort failed.

Mr. Meister pledged at the time to continue pushing for changes at the company from the outside.

In a securities filing earlier this month, Corvex cast doubt on the current board's ability to hold company executives accountable, saying the current directors lack substantial experience at public companies.

Write to David Benoit at david.benoit@wsj.com and Alison Sider at alison.sider@wsj.com

 

(END) Dow Jones Newswires

August 23, 2016 02:48 ET (06:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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