The Williams Companies shareholders’ special meeting set for Monday, which was called to vote on the merger, is still scheduled to take place. Williams has said it is committed to closing the deal, and is considering appealing the ruling, a person familiar with the matter said.
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The judge ruled Friday that Energy Transfer can get out out of the deal due to tax complications.
ETE argues that it is not able to close the deal because its tax advisers at Latham & Watkins could not determine that the deal would be tax-free, as anticipated when the agreement was originally signed.
Williams Companies and Energy Transfer Equity battled this we week over their roles in the merger.
The ruling also means ETE can walk away from the deal without paying a stiff penalty. It was this clause that let Chancery Court Judge, Sam Glasscock, to vote in favor of Energy Transfer.
Jefferies & Co. analyst Christopher Sighinolfi said in a report that other items remain unsettled, including uncertainty regarding whether Williams will pursue damages relating to ETE’s March issuance of Series A units and whether ETE will unwind the Series A issuance given that its leverage concerns are likely reduced without the merger’s cash requirements. Williams, however, disagreed and sued Energy Transfer Equity, saying it was using this tax problem as an excuse not to hold up its end of the bargain because it now wanted out of the deal.
For Williams Companies the deal is not over yet.
If a merger is approved, officials say Williams offices in Tulsa and Oklahoma City could be eliminated. “The Williams Board has not changed its recommendation “FOR” the merger agreement executed on September 28, 2015″, the company said in a statement. The Tulsa Regional Chamber also cheered the court ruling and has urged the company’s shareholders to reject the deal.
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02/26/2016 – Energy Transfer Equity, L.P. was downgraded to “market perform” by analysts at Raymond James. It may even bolster its financing if it gets $1.48 billion in break-up fee that can be used to serve its debt.
