Williams CEO: Evaluating All Options In Bid War For Rival Southern Union

Williams Cos. (WMB) Chief Executive Alan S. Armstrong said Tuesday that the pipeline owner continues to "evaluate all options" in its bid to merge with rival Southern Union Co. (SUG).

Southern Union last month agreed to a $5.7 billion cash-and-stock buyout offer from Energy Transfer Equity LP (ETE), trumping Williams' most recent bid of $5.6 billion. The bidding war, which would create the largest natural gas pipeline company in the U.S., added about $1.5 billion to Energy Transfer's opening $4.2-billion offer in mid-June.

Armstrong declined to say Tuesday whether Williams was considering a new offer or if it had set any internal deadlines to decide whether to make one, but he did say, "We'll certainly be a disciplined buyer."

Armstrong, speaking to investors on a conference call to discuss the Tulsa, Okla., company's second- quarter earnings, declined further comment on Southern Union.

Williams Cos.'s second-quarter profit, disclosed last week, rose 23% to $227 million, or 38 cents a share, from $185 million, or 31 cent a share, a year earlier. Excluding items such as charges from the restructuring of its Williams Partners LP (WPZ) segment, earnings from continuing operations rose to 39 cents a share from 28 cents. Williams did not provide revenue figures.

Analysts surveyed by Thomson Reuters expected 39 cents a share.

Williams and Energy Transfer are banking that combining their position in prolific natural gas production areas, with Southern's access to Florida and Midwestern markets, will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in recent years has unlocked an unprecedented natural gas bounty from deeply buried rock formations, including shales.

Shares of Williams rose 5.74% to $25.42 in early trading.

-By Ryan Dezember, Dow Jones Newswires, 713-560-6670, [e-mail]

-Joan E. Solsman and Ben Lefebvre contributed to this article.