Williams Cos to cut dividend if Energy Transfer deal fails

Energy Transfer Equity LP previously said if the Williams Cos purchase deal goes through, the company will likely have to cut its distributions to shareholders entirely next year.

June 8 (Reuters) – Williams Cos Inc said on Wednesday it will cut its dividend next quarter if a deal to sell itself to rival U.S pipeline company Energy Transfer Equity LP falls through.

Energy Transfer’s proposed acquisition of Williams has been in doubt for months, with Williams alleging that Energy Transfer has been actively trying to break the deal. The two companies have sued each other, and a trial over tax issues that could scuttle the deal is scheduled for later this month.

Williams, which has paid a dividend every quarter since 1974, said it has not yet determined how much it will cut its dividend if the deal falls through, but said it could be a material reduction.

A shareholder vote on the deal is scheduled for June 27, and Williams said it is committed to closing the transaction “as soon as possible.”

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The company’s shareholders face a dividend cut however they vote on the deal. Energy Transfer has previously said it will likely have to cut its distributions to shareholders entirely next year if the takeover is completed.

Williams said on Wednesday it would pay a regular dividend of 64 cents per share for the current quarter on June 27 to shareholders on record as of June 20.

Energy Transfer launched an unsolicited bid for Williams in June and reached a deal with the company in September that was then worth $33 billion.

Earlier this week, the mayor of Tulsa, Oklahoma — the city where Williams is headquartered — sent a letter to the company’s shareholders asking them to vote against the deal. Energy Transfer has said it will said it will have to cut jobs substantially in Tulsa and Oklahoma City.

Three former Williams chief executives have also sent shareholders a letter recommending that they vote against the deal.

(Reporting by Swetha Gopinath in Bengaluru and Michael Erman in New York; Editing by Savio D’Souza and Tom Brown)