By Austen Hufford

Williams Cos. said more than two-thirds of its shareholders voted to accept an embattled deal with rival Energy Transfer Equity LP, a deal that may not happen because of a court ruling last week.

Williams recommended that its shareholders vote in favor of the takeover by Energy Transfer. On Friday, a Delaware judge ruled that Energy Transfer can get out of the deal after its lawyers said they had discovered negative tax consequences.

Over all, 68.4% of Williams shareholders voted to accept the deal, with the vast majority choosing the $43.50 in cash option, with small numbers of shareholders picking an all-stock or a cash-stock option.

Williams has spent months arguing publicly that investors would be better off going through with the deal, even as Energy Transfer did everything it could to get out.

Energy Transfer struck a deal in September that was worth $33 billion at the time. But as oil prices continued to slide, Energy Transfer had second thoughts.

When Energy Transfer said its lawyers had found a potential tax pitfall and wouldn't be able to deliver a crucial opinion needed for the deal to close, Williams accused its acquirer of looking for an escape hatch. It sued to force Energy Transfer to go through with the merger, but Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery sided with Energy Transfer on Friday, finding that its lawyers were acting in good faith when they found the issue.

Shares of Williams Cos. fell 3.6% to $20.53 as Energy Transfer Shares Rose 1.9% to $14.10 in morning trading.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

June 27, 2016 10:23 ET (14:23 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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