Williams to hold off on MLP acquisition vote

OREANDA-NEWS. July 31, 2015. Infrastructure operator Williams said it will delay a shareholder vote on the buy out of its affiliated master limited partnership (MLP) until it has examined alternatives for a possible sale of the company.

The termination of the MLP acquisition was one of the pre-requisites for an unsolicitied \\$53bn takeover bid from Energy Transfer Equity (ETE). Williams declined to comment on the ETE bid during its earnings conference call today.

Williams last month rejected ETE's bid, saying it significantly undervalues the company and would not deliver the same value as other growth initiatives. ETE responded by threatening a hostile takeover if the two companies can't negotiate a deal.

Since then, the companies appear to be in merger discussions. According to a 16 July filing with the US Securities and Exchange Commission, ETE has signed a confidentiality agreement with Williams and said it expects to be engaged in Williams' "strategic alternatives process" to explore a merger or sale.

ETE proposed an all-equity transaction that includes the assumption of debt and other liabilities. Under the plan, ETE would acquire the outstanding stock of Williams at \\$64/share, a 32.4pc premium to the Williams' common share closing price on 19 June.

ETE sent the unsolicited written offer to the Williams board after Williams announced in May that it will acquire all of the outstanding shares of Williams Partners for around \\$33bn in an effort to simplify its corporate structure.

A merger of Williams and ETE would create one of the largest infrastructure companies in the world, bigger even than Kinder Morgan, which owns or operates about 84,000 miles of pipelines..

ETE is part of the Energy Transfer group of companies, which owns about 71,000 miles of natural gas, NGLs, refined products and crude pipelines. Williams owns a 66pc interest in Williams Partners, which owns and operates more than 33,000 miles of pipelines.