Energy Transfer to participate in auction for US pipeline company Williams
By MATTHEW MONKS
Bloomberg
Energy Transfer Equity has signed a confidentiality agreement to participate in an auction for Williams Cos., the pipeline company that turned down its $48 billion takeover offer last month.
Energy Transfer “expects to engage in Williams’s strategic alternatives process,” a spokesman for Energy Transfer said in an e-mailed statement to Bloomberg Thursday.
Energy Transfer had been pushing back against a requirement that it promise not to go hostile as a condition for getting access to Williams’s books, people familiar with the matter said earlier this month.
The confidentiality agreement signed by Energy Transfer has no such “standstill” clause preventing it from pursuing a deal outside the auction, a person with knowledge of the matter said Thursday, asking not to be identified as the information is private.
“Some sort of auction would still have to beat Energy Transfer Equity’s original offer, so they are sitting in a position of strength going into it,” said Michael Kay, pipeline analyst for Bloomberg Intelligence.
Williams gained 0.6% to $58.32 at 10:06 a.m. in New York. Energy Transfer Equity fell 0.5%.
“We’re pleased that Energy Transfer Equity has signed a confidentiality agreement,” Williams said in an e-mailed statement. “A robust, competitive process with all interested parties is the best way to maximize shareholder value.”
Offer Affirmed
Dallas-based Energy Transfer also affirmed its June 21 offer to acquire Williams in an all-stock exchange of 0.9358 share for each Williams share, a 32% premium to the June 19 closing price, according to a filing Friday.
Williams last month said it hired Barclays and Lazard to “explore a range of strategic alternatives” after receiving an unsolicited offer it deemed insufficient from a suitor later identified as Energy Transfer.
Energy Transfer’s offer for Williams announced last month depends on the target abandoning a $14 billion purchase of the units it doesn’t already own in operating unit Williams Partners. Williams has said that deal would simplify its structure, reduce taxes and generate cash for expansion projects, while Energy Transfer has argued its bid would provide better value to Williams investors.
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