By June 22, 2015 Read More →

Williams rejects Energy Transfer Equity $53B bid

Williams says Energy Transfer Equity undervalues company

The Williams Cos. rejected a $53 billion buyout offer from Energy Transfer Equity, but said that it may still put the natural-gas pipeline company up for sale.

Energy Transfer Equity

Kelcy Warren, CEO of Energy Transfer Equity.

Its stock jumped more than 26 per cent in premarket trading.

Williams said ETE’s bid significantly undervalues the business, but that it was exploring other strategic options.

Energy Transfer Equity confirmed Monday that it had offered $64 per share, a 32 per cent premium to Williams’ closing price Friday. It put the deal’s total value at $53.1 billion, including debt and other liabilities.

Energy Transfer Equity LP, of Dallas, says it has been trying for six months to negotiate with Williams’ senior management.

“ETE has made multiple attempts over an almost six-month period to engage in meaningful, friendly dialogue with the senior management of Williams regarding a proposed merger,” ETE officials said in a statement.

Energy experts have been predicting more consolidation in the energy transportation sector, especially in natural gas given the huge reserves only recently unlocked by new drilling methods.

The deal would give Energy Transfer Equity access to Williams’ assets in the northeast. Most of ETE’s operations are in the Midwest and South.

“With the assistance of its outside financial and legal advisors, the Williams Board carefully considered the unsolicited proposal and determined that it significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis and through other growth initiatives, including the pending acquisition of Williams Partners,” Williams said in a statement.

Williams, based in Tulsa, Oklahoma, recently announced plans to acquire the remaining stake of Williams Partners LP that it doesn’t already own. The Energy Transfer Equity offer was contingent on Williams endings its plans to acquire Williams Partners.

“ETE is disappointed that, despite the best of intentions and its efforts to reach a friendly, negotiated combination, it is forced into a position to publicly confirm its offer for Williams,” ETE said in a statement. “Unfortunately, until Williams’ announcement today, Williams’ management has inexplicably ignored ETE’s efforts to engage in a discussion with Williams regarding a transaction that presents a compelling value proposition for its stockholders.”

With files from Associated Press.

Posted in: Energy Financial

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