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Southern Union, Williams to Discuss $9.4B Bid

Southern Union Co. agreed Friday to discuss a revised merger bid from Williams, which Thursday offered $44/share, or a total of $9.4 billion, to acquire the natural gas operator (see Daily GPI, July 15).

Dallas-based Energy Transfer Equity LP (ETE) in mid-June launched a friendly $33/share takeover of Southern Union. A week later, Williams countered with a $39 bid. ETE then raised its offer to $40/share earlier this month, only to be topped by the latest Williams bid. Southern Union closed at $43.42/share on Thursday.

Williams has given Southern Union less than a week to finalize the latest transaction's terms, asking for discussions to be successfully completed by Tuesday.

Although it has an agreement in place with ETE, Southern Union on Friday stated in an 8-K filing with the Securities and Exchange Commission that if the board of directors didn't consider Williams latest offer it "would be reasonably likely to constitute a breach by the board of its fiduciary duties." However, "the board's determination does not mean that it has determined that the second Williams proposal currently constitutes a 'superior offer' as defined in the amended merger agreement," the filing stated.

"We are confident that our all-cash, premium proposal is in the best interests of both companies' shareholders, and we are pleased that Southern Union will engage in discussions with Williams," said Williams CEO Alan Armstrong. "We look forward to working together with Southern Union and to quickly executing a definitive merger agreement."

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