A Friday decision by a Delaware judge, has effectively signaled the demise the merger of Williams Cos. (WMB) and its potential acquirer, Energy Transfer Equity (ETE), even as Williams’ shareholders are scheduled to vote on the deal Monday.
The judge ruled Friday that Energy Transfer can get out out of the deal due to tax complications. Williams had sued ETE arguing that tax attorneys were helping ETE scuttle the deal by failing to come up with an opinion letter on tax issue. The judge found the attorneys were acting in good faith. Without the letter, the deal can’t close by the Tuesday deadline agreed to by both parties.
In pre-market trading Monday, Williams shares were down 7% to $19.91. ETE’s shares were up 7% to $14.85. Both companies shares are down about 60% in the past year.
Williams continues to ask its shareholders to vote in favor of the deal. It is likely to appeal, according to The Wall Street Journal, which explains:
Williams has spent months arguing publicly that investors would be better off going through with the deal, even as Energy Transfer did everything it could to get out, and relations between the companies turned rancorous.
The legal fight will likely continue. Williams has said it is committed to closing the deal, and is considering appealing the ruling, a person familiar with the matter said. If Williams loses that appeal, it could sue Energy Transfer for damages.
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