Energy Transfer Equity LP (ETE) and Williams have signed a confidentiality agreement related to ETE’s proposed buyout of Williams, the former said late Thursday.

Dallas-based ETE “expects to engage in Williams’ strategic alternatives process” and…”is looking forward to engaging with Williams and working towards a transaction that will deliver compelling value to both companies’ stakeholders.”

The company has proposed to acquire all of the outstanding common stock of Williams at a fixed exchange ratio of 0.9358 Energy Transfer Corp. shares for each Williams share, representing a 32.4% premium.

Tulsa, OK-based Williams rejected ETE’s bid last month and said it was considering alternatives that could include a sale or merger (see Daily GPI,June 22). Earlier this month, ETE reaffirmed its bid and said it was willing to go hostile to push it through (see Daily GPI, July 8).

ETE has now agreed to enter into Williams potential auction process; however, according to unnamed sources cited by Bloomberg, ETE is not precluded from pursuing a deal outside an auction.

The ETE offer is couched as an alternative to the proposed merger of Williams and Williams Partners LP (see Daily GPI, May 13).