Williams rejects Energy Transfer takeover bid

OREANDA-NEWS. US infrastructure operator Williams rejected an unsolicited takeover proposal from Energy Transfer Equity (ETE), saying that it significantly undervalues the company and would not deliver the same value as other growth initiatives.

Williams said it will explore "strategic alternatives" following ETE's written proposal to merge with Williams in an all-equity transaction valued at \\$53.1bn, including the assumption of debt and other liabilities.

Under the plan, ETE would acquire the outstanding common stock of Williams at \\$64/share, which is a 32.4pc premium to the Williams' common share closing price on 19 June.

ETE said it made multiple attempts in the past six months to engage in a "meaningful, friendly dialogue" with the senior management of Williams regarding a proposed merger, but felt compelled to send a written offer to the board after Williams announced in May that it will acquire all of the outstanding shares of its affiliated master limited partnership (MLP) Williams Partners, in an effort to simplify its corporate structure.

Under that deal, Williams will buy the 42pc of Williams Partners' shares that it doesn't already own, in an all stock deal worth about \\$33bn. That merger is expected to close in the fall of 2015 following regulatory filings.

ETE said its takeover proposal is conditioned on the termination of the merger between Williams and Williams Partners. The ETE proposal is "a more compelling transaction," the company said.

"A combination of Williams' assets with ETE will create substantial value that would not be realized otherwise," said ETE chairman Kelcy Warren.

Energy Transfer's bid for Williams follows a number of midstream deals announced in recent months. Earlier in June, the US's second-largest propane retailer, Ferrellgas Partners, announced that it will buy crude logistics company Bridger Logistics for \\$837.5mn. Pioneer Natural Resources also said it would sell its Eagle Ford shale condensate and natural gas gathering joint venture for \\$2.15bn to Enterprise Products Partners.

In January Kinder Morgan spent \\$3bn to acquire Bakken pipeline company Hiland Partners. And in November 2014, Enterprise Products Partners and Oiltanking Partners agreed to merge, combining two major operators of crude storage and pipelines on the Gulf coast.