Williams appeals ETE merger ruling

OREANDA-NEWS. June 28, 2016. Williams has appealed a court ruling that would allow Energy Transfer Equity (ETE) to terminate the \\\$32.6bn merger agreement between the two companies.

Williams today petitioned the Delaware Supreme Court to reconsider a Delaware chancery court judge's 24 June ruling that paved the way for ETE to terminate a merger deal reached in September 2015. Williams sued ETE on 13 May, seeking to prevent the partnership from terminating the agreement.

The merger, announced with great fanfare, has deteriorated as the companies are now suing each other for breach of contract as their stocks have plummeted amid the downturn in crude prices.

The deal would create one of the largest infrastructure companies in the world, combining ETE's 71,000 miles of natural gas, NGL, refined products and crude pipelines with Williams' 33,000 miles of pipelines.

The future of the agreement is uncertain.

Williams said today it "remains ready, willing and able to close the merger agreement." If ETE terminates the merger, Williams "will take appropriate actions to enforce its rights." Williams' stockholders today voted to approve the merger.

The lawsuit came after ETE on 5 May said it might not be able to close the merger because of a tax issue, and indicated it wanted to again restructure the deal ahead of a 28 June deadline, after which the parties can step away from the merger.

Williams was suing to prevent ETE from using either the deadline or the tax question as grounds to terminate the agreement.

Williams said today that ETE does not have a right to terminate the merger because ETE breached the agreement "by failing to cooperate and use necessary efforts to satisfy the conditions to closing."

ETE did not respond to a request for comment.

The latest merger agreement, approved by the boards of directors of both companies, was well below the \\\$53bn unsolicited bid ETE made for Williams in June 2015, when crude prices were closer to \\\$60/bl. Under the September agreement, ETE would pay \\\$43.50 for each share of Williams, for a deal worth about \\\$32.6bn not including debt.