Williams Takes Another Look At Southern Union Assets - Filing
October 28 2011 - 6:27PM
Dow Jones News
Pipeline company Williams Cos. (WMB) recently resumed
discussions with Energy Transfer Equity LP (ETE) to buy assets
belonging to Energy Transfer's takeover target, Southern Union Co.
(SUG), according to a securities filing.
The disclosure, found in the merger agreement Houston-based
Southern Union filed with U.S. regulators Thursday, shows Williams
still jostling to end up with part of Southern's pipeline empire,
after previous discussions had fizzled out.
Energy Transfer beat Williams in a monthslong bidding war this
summer to decide which company would buy Southern to become one of
the largest natural gas pipeline companies in the United States.
Southern shareholders will vote on approve Energy Transfer's $5.7
billion cash-and-stock offer on Dec. 9.
Williams Chief Executive Alan Armstrong met with Energy Transfer
executives in the week leading up to Oct. 21 "to make a proposal"
about buying part of Southern's assets after the merger, according
to Southern's filing with the U.S. Securities and Exchange
Commission.
This would be the second time that Williams tried to discuss a
three-way deal between Energy Transfer and Southern Union for some
of the latter's assets after losing its bid for the whole company.
Energy Transfer said earlier this month that Williams asked for
similar talks on Sept. 2 but was shot down by Energy Transfer and
Southern.
In its filing, the company said that it had not authorized the
latest round of conversations between Energy Transfer and Williams.
The company declined to comment or provide further details.
Williams "is continuing to monitor the situation and evaluate
its options," a spokesman said.
Williams and Energy Transfer operate large interstate pipelines
that transport natural gas from major energy fields. Southern is
attractive to both companies because its lines offer access to big
gas-consumption markets in Florida and the Midwest. New drilling
technology has unlocked natural gas supply from previously
unproductive shale rock formations, forcing pipeline companies to
expand their operations in order to profit from those new sources
of fuel.
Fourteen companies in total have taken a look at Southern's
assets for possible acquisition since 2008, according to Southern's
filing. It was Energy Transfer's $4.2 billion offer in June that
touched off the bidding war that eventually added $1.5 billion to
Southern's price tag.
-By Ben Lefebvre, Dow Jones Newswires; 713-547-9201;
ben.lefebvre@dowjones.com
--Ryan Dezember in New York contributed to this article
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