Shale Daily / NGI All News Access

Southern Union in the Catbird Seat, Agrees to Talks with Williams

An agreement to merge with Energy Transfer Equity LP (ETE) may be in place, but Southern Union Co. agreed Friday to discuss a higher offer from Williams.

On Thursday Williams trumped ETE's latest offer by 10%, offering Southern Union $44/share, or a total of $9.4 billion, to merge (see Shale Daily, July 15). Dallas-based 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. 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.

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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