Williams Files Appeal to Close Energy Transfer Merger

By Alison Sider and Austen Hufford 

Williams Cos. said that it will continue its legal fight to close a merger with Energy Transfer Equity LP, after its shareholders voted Monday to approve the troubled deal.

Williams said votes cast in favor of the merger represented more than 63% of all outstanding shares.

Under normal circumstances, the stamp of approval from investors would clear the way for the deal to close. But on Friday, a Delaware judge ruled that Energy Transfer would be allowed to terminate the merger agreement after its lawyers said they wouldn't be able to deliver a tax opinion needed for the deal to close.

Williams on Monday said it filed papers commencing an appeal of the judge's decision to the Delaware Supreme Court. It said it still believes Energy Transfer breached their merger agreement and doesn't have the right to terminate it.

"Williams remains ready, willing and able to close the merger under the Merger Agreement entered into with ETE on September 28, 2015," the company said in a statement.

Energy Transfer declined to comment on Monday.

Since the deal was announced, and as oil prices continued to slide, Energy Transfer has had second thoughts, particularly about the $6 billion cash component of the deal, originally valued at nearly $33 billion when it was signed last fall.

Earlier this year, Energy Transfer said its lawyers had discovered that the deal could potentially trigger a big tax bill, and they couldn't sign off on it. Williams took Energy Transfer to court to try and hold the company to the terms of the merger agreement.

Last September, Energy Transfer agreed to buy Williams in a deal that valued Williams at $43.50 a share. Williams shareholders could elect to receive that compensation in cash and/or Energy Transfer stock, subject to proration.

Williams said Monday that 62.3% of shareholders elected to receive it all in cash, 3.2% voted to get just Energy Transfer stock, 2.9% wanted a mix of cash and stock, and 31.6% failed to make a valid election.

Shares of Williams Cos. closed down 6.2% at $20, while Energy Transfer shares fell 1.7% at $13.60.

Write to Alison Sider at [e-mail] and Austen Hufford at [e-mail]

(END) Dow Jones Newswires

June 27, 2016 16:46 ET (20:46 GMT)

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