Southern Union board authorizes merger talks with US midstream firm Williams
The board of directors for natural gas pipeline firm Southern Union said on Friday that it authorized the company to engage in discussions with US midstream firm Williams regarding its $44/share all-cash bid to acquire the company.
The Southern Union committee made the determination to engage in discussions and to provide information to Williams pursuant to Section 5.4 of Southern Union's merger agreement with Energy Transfer, the company said.
That agreement now appears in jeopardy.
"We are confident that our all-cash, premium proposal is in the best interests of both companies' shareholders, and we are pleased that Southern Union will engage in discussions with Williams," said Alan Armstrong, Williams CEO.
"We look forward to working together with Southern Union and to quickly executing a definitive merger agreement."
As previously announced, Williams proposed to acquire all of Southern Union's outstanding common stock for $44/share in cash.
Williams' enhanced proposal represents a premium of 10% over the nominal purchase price in Southern Union's recently revised agreement with Energy Transfer, it said, announced on July 5.
Williams proposal also represents a premium of 56% over Southern Union's closing share price of $28.26 on June 15, the last trading day prior to the initial Energy Transfer announcement.
Williams has strengthened its commitment to gaining regulatory approval and will close the transaction on a timeline consistent with the proposed Energy Transfer transaction, it said.
Williams is committed to take all necessary actions to obtain federal anti-trust clearance and will otherwise provide the same degree of regulatory certainty as the proposed Energy Transfer transaction.
The Williams proposal is not subject to any financing conditions. Williams said it is prepared to deliver bank financing commitments to finance the all-cash purchase price concurrent with signing the merger agreement.
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