2011-06-30-2011-06-22
Made rival bid to acquire midstream company operating in TX, NM,FL, MO, MA & other U.S. areas, gaining 5,500 miles of pipeline, 4 cryogenic processing plants & 5 gas-treating plants.
The Williams Cos. Inc., Tulsa, Okla., (NYSE: WMB) has made a rival bid to buy Southern Union Co., Houston, (NYSE: SUG) for $8.7 billion in cash.
Energy Transfer Equity LP, Dallas, (NYSE: ETE) previously made an offer to acquire Southern Union for $7.9 billion, including approximately $3.7 billion of existing debt.
Williams will offer $39 per Southern Union share, which the company claims is a 18% premium to the $33 per share offer made by Energy Transfer and a 38% premium to Southern Union's share price the day before Energy Transfer's offering.
Southern Union engages in gathering, processing, transportation, storage and distribution of gas in the U.S. The gathering and processing segment of the company operates a network of approximately 5,500 miles of natural gas and NGL pipelines in Texas and New Mexico, which includes four cryogenic processing plants with a combined capacity of 415 million cubic feet per day and five natural gas treating plants with a combined capacity of 585 million cubic feet per day.
The transportation and storage segment provides interstate transportation and storage in the Midwest and from the Gulf Coast to Florida. It also provides LNG terminalling and regasification services.
The distribution segment operates in Missouri and Massachusetts.
Southern Union reports it will review the Williams proposal. Energy Transfer in turn contests Williams' offer, arguing that its bid is not $33 per share as Williams claims and that it has committed financing to fund the deal, which it claims Williams does not.
Barclays Capital and Citi are financial advisors to Williams.
Williams president and chief executive Alan Armstrong says, "Williams' proposal is compelling for both Southern Union and Williams investors," says Alan Armstrong, Williams' president and chief executive officer. "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.