Energy Transfer battles Williams' $4.9 bn rival bid for Southern Union

The battle to acquire US natural gas pipeline operator Southern Union Co has heated up after Williams Companies late last week made a $4.9-billion bid, eclipsing the $4.1-billion takeover offer from Energy Transfer Equity LP (ETE).

But Dallas-based ETE is fighting back by saying that Southern Union cannot open its books to Williams according to the agreement between Southern Union and Energy Transfer.

In a letter to its smaller rival on Sunday, ETE said that the Southern Union's board ''is not permitted by the merger agreement to engage in any discussions or negotiations with Williams.'' It also said that Southern Union should not provide non-public information to Williams.

On 16 June, ETE said that it would acquire Southern Union for about $4.1 billion valuing Southern Union at about $4.1 billion.

The deal would catapult ETE into the largest natural gas pipeline company in the US and a $40-billion natural gas midstream company. (See: Pipeline operator Energy Transfer to buy rival Southern Union for $4.1 billion) http://www.domain-b.com/industry/oil_gas/20110617_energy_transfer_oneView.html

Under the deal, Houston-based Southern Union will get new units worth $33 each or approximately $4.2 billion, representing a 17-per cent premium to its 15 June closing price.