Energy Transfer, Southern Union Reach New $5.7 Billion Deal

  DOW JONES NEWSWIRES 
 

Texas pipeline company Southern Union Co. (SUG) agreed to a sweetened $5.7 billion cash-and-stock buyout offer from Energy Transfer Equity LP (ETE) instead of a bid from rival suitor Williams Cos. (WMB)

Under Energy Transfer's latest offer, Southern Union holders can elect to receive $44.25 in cash or one Energy Transfer Equity common unit, worth $44.03 as of Monday's close. The total value of the deal, including debt assumption, is about $9.4 billion.

Energy Transfer and Williams have been competing to merge with Southern. The successful suitor is expected to become the country's largest natural-gas pipeline company following the deal.

Williams last week had raised its bid to $5.6 billion, or $44 a share. Southern had said at that time it would review the Williams proposal, but its board also had reaffirmed its recommendation for an existing Energy Transfer accord.

A Williams spokesperson wasn't immediately available for comment.

The bidding for Southern Union started in mid-June with a $4.2 billion offer from Energy Transfer.

Energy Transfer on Tuesday also reached an amended agreement to sell Southern Union's 50% interest in Citrus Corp., owner of the Florida Gas Transmission pipeline system, to Energy Transfer Partners LP (ETP) for $2 billion. Regulators are requiring Energy Transfer Equity to sell the stake when the Southern Union acquisition closes.

Southern Union shares were up 1.8% at $44.09 in recent trading, while Energy Transfer was off 0.3% at $43.88. Williams was up 2 cents at $27.09.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; [e-mail]