Williams Files Appeal to Close Energy Transfer Merger
June 27 2016 - 5:01PM
Dow Jones News
By Alison Sider and Austen Hufford
Williams Cos. said that it will continue its legal fight to
close a merger with Energy Transfer Equity LP, after its
shareholders voted Monday to approve the troubled deal.
Williams said votes cast in favor of the merger represented more
than 63% of all outstanding shares.
Under normal circumstances, the stamp of approval from investors
would clear the way for the deal to close. But on Friday, a
Delaware judge ruled that Energy Transfer would be allowed to
terminate the merger agreement after its lawyers said they wouldn't
be able to deliver a tax opinion needed for the deal to close.
Williams on Monday said it filed papers commencing an appeal of
the judge's decision to the Delaware Supreme Court. It said it
still believes Energy Transfer breached their merger agreement and
doesn't have the right to terminate it.
"Williams remains ready, willing and able to close the merger
under the Merger Agreement entered into with ETE on September 28,
2015," the company said in a statement.
Energy Transfer declined to comment on Monday.
Since the deal was announced, and as oil prices continued to
slide, Energy Transfer has had second thoughts, particularly about
the $6 billion cash component of the deal, originally valued at
nearly $33 billion when it was signed last fall.
Earlier this year, Energy Transfer said its lawyers had
discovered that the deal could potentially trigger a big tax bill,
and they couldn't sign off on it. Williams took Energy Transfer to
court to try and hold the company to the terms of the merger
agreement.
Last September, Energy Transfer agreed to buy Williams in a deal
that valued Williams at $43.50 a share. Williams shareholders could
elect to receive that compensation in cash and/or Energy Transfer
stock, subject to proration.
Williams said Monday that 62.3% of shareholders elected to
receive it all in cash, 3.2% voted to get just Energy Transfer
stock, 2.9% wanted a mix of cash and stock, and 31.6% failed to
make a valid election.
Shares of Williams Cos. closed down 6.2% at $20, while Energy
Transfer shares fell 1.7% at $13.60.
Write to Alison Sider at alison.sider@wsj.com and Austen Hufford
at austen.hufford@wsj.com
(END) Dow Jones Newswires
June 27, 2016 16:46 ET (20:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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