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Southern Union Agrees to Negotiate Tie-Up with Williams

Williams said Tuesday it hopes to complete negotiations quickly after Southern Union Co. agreed to consider its unsolicited takeover offer.

In a regulatory filing Tuesday with the Securities and Exchange Commission (SEC), Southern Union said that after consulting with its lawyers and bankers it believed it was allowed and had a duty to enter into takeover talks with Williams.

Southern Union in mid-June had agreed to be acquired by Energy Transfer Equity LP (ETE) for about $33/share in an all-stock deal worth $7.9 billion, including $4.37 billion of debt (see Daily GPI, June 17). Last week Williams extended a counteroffer, proposing to acquire Southern Union in an all-cash deal for $39/share, putting the total enterprise value at around $8.7 billion, including debt (see Daily GPI, June 27).

Southern Union said in its SEC filing it has asked Williams to sign a confidentiality agreement, which would allow it to review the company's finances. The filing indicated that the company had not determined whether Williams' conditional acquisition offer was "superior" to ETE's.

The filing followed a statement by ETE, which on Monday warned that Southern Union was "not permitted by its merger agreement to engage in discussions or negotiations" and wasn't allowed to provide confidential financial information to Williams.

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