Energy Transfer Equity LP (ETE) has signed a confidentiality agreement to participate in an auction for Williams Cos. Inc. (WMB), the pipeline company that turned down its $48 billion takeover offer last month.
Energy Transfer “expects to engage in Williams’ strategic alternatives process,” a spokesman for Energy Transfer said in an e-mailed statement to Bloomberg July 16.
Energy Transfer had been pushing back against a requirement that it promise not to go hostile as a condition for getting access to Williams’ books, people familiar with the matter said earlier this month. The confidentiality agreement signed by Energy Transfer has no such “standstill” clause preventing it from pursuing a deal outside the auction, a person with knowledge of the matter said July 16, asking not to be identified as the information is private.
Dallas-based Energy Transfer also affirmed its June 21 offer to acquire Williams in an all-stock exchange of 0.9358 share for each Williams share, a 32% premium to the June 19 closing price, according to a filing July 17.
A representative for Tulsa, Oklahoma-based Williams didn’t immediately return a phone call seeking comment outside regular business hours.
Williams last month said it hired Barclays Plc and Lazard Ltd. to “explore a range of strategic alternatives” after receiving an unsolicited offer it deemed insufficient from a suitor later identified as Energy Transfer.
Energy Transfer’s offer for Williams announced last month depends on the target abandoning a $14 billion purchase of the units it doesn’t already own in operating unit Williams Partners LP (WPZ). Williams has said that deal would simplify its structure, reduce taxes and generate cash for expansion projects, while Energy Transfer has argued its bid would provide better value to Williams investors.
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