US natgas firm Williams outbids Energy Transfer on proposed Southern Union acquisition
Williams said Thursday that it is offering $39/share in cash for all outstanding shares of Southern Union, making a total enterprise value of $8.7 billion.
Williams conveyed the all-cash, premium proposal via a letter to the special committee of Southern Union's board of directors.
Williams' all-cash proposal represents a premium of 18% over the nominal purchase price in Southern Union's proposed transaction with Energy Transfer, announced on June 16, the company said.
The Williams proposal also represents a premium of 38% over Southern Union's closing share price the day prior to the Energy Transfer announcement.
The Williams proposal is not subject to any financing contingency. Barclays Capital and Citi are acting as financial advisors to Williams and have said they are highly confident in Williams' ability to finance the all-cash purchase price, officials said.
"Williams' proposal is compelling for both Southern Union and Williams investors," said Alan Armstrong, Williams CEO. "Our proposal provides significantly greater value to all Southern Union shareholders than they would receive from Energy Transfer and a path to realize such premium value that is more transparent, more expedient and more certain.
"We are confident the combination will further strengthen our ability to deliver value and growth from an extraordinary suite of energy-infrastructure assets," Armstrong continued.. "The two asset portfolios are complementary and strategically positioned in growing supply areas, including key shale basins, and end-use markets.
“The combination would enhance Williams' position as a North American leader in services that are vital to connect new supplies of natural gas in growing resource plays to markets that are anxious to enjoy the benefits of affordable, clean natural gas.
“Additionally, based on publicly available information, we expect to realize cost savings of more than $50 million annually and to immediately increase cash flows in support of Williams' high-dividend strategy.
"We look forward to working closely with Southern Union to quickly reach an agreement on a transaction."
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