Williams Cos. Inc. (WMB)

[eastunder]

ETE says Williams filed lawsuit to gain leverage in deal talks

Mon, May 16, 2016, 9:57AM EDT

http://finance.yahoo.com/news/ete-says-williams-filed-lawsuit-010426496.html


May 15 (Reuters) - Energy Transfer Equity LP on Sunday accused its buyout target Williams Companies Inc of filing a third lawsuit against it in an attempt to gain leverage in any future deal talks between the two pipeline companies.

Williams filed its latest lawsuit in a Delaware court on Friday to prevent ETE, which has said the economics of its takeover of Williams have been altered by the fall in oil prices, from terminating that deal..

"...We believe Williams' latest lawsuit is an attempt to gain undue leverage in and undermine future discussions regarding the pending merger and will only result in further delay," ETE Chief Executive Kelcy Warren said in a statement on Sunday.

Williams on Sunday declined to comment. The company has alleged that ETE is looking into ways to walk away from the tie-up even though the terms of the deal would not allow that before June 28.

Dallas-based ETE said it is asking the Williams board to reconsider whether it still recommends its shareholders approve the deal given material changes since they reached agreement on Sept. 28 for ETE to acquire Williams in a transaction originally valued at nearly $33 billion.

ETE said last month that its lawyers may not be able to deliver an important tax opinion for its takeover of Williams, throwing the agreed acquisition into doubt.

The company said that before the suit was filed, it was making progress towards clearing all comments by the U.S. Securities and Exchange Commission and finalizing a prospectus for Williams' shareholders.

ETE also said that Williams has prevented it from reaching out to its board and did not respond to its requests before filing the lawsuit.

ETE slashed its expectations from the Williams deal in March saying that cost savings could be all but wiped out by low oil prices and higher capital costs.

ETE had said, in a SEC filing, that it expects the base case for earnings before interest, taxes, depreciation and amortization from commercial synergies from the deal to be about $170 million a year by 2020, compared with previous forecasts of more than $2 billion.

Tulsa, Oklahoma-based Williams had also filed a suit earlier against ETE in Delaware to stop a controversial offering of preferred shares to its top shareholders. It has also sued Warren in Texas over the same offering.

(Reporting by Parikshit Mishra in Bengaluru; Editing by Cynthia Osterman)