Williams Shareholders Said to Approve Energy Transfer Merger

  • Shareholder vote sets company up for appeal of court ruling
  • Delaware judge ruled Friday that ETE could walk away from deal

Williams Cos.’s proposed merger with pipeline rival Energy Transfer Equity LP lives on -- at least in Williams’ eyes-- after shareholders were said to approve the multibillion-dollar deal.

Investors voted Monday for the merger at a special meeting in Tulsa, Oklahoma, according to a person familiar with the results. The vote sets the stage for an appeal of a ruling Friday by Delaware Chancery Court Judge Sam Glasscock that Energy Transfer can walk away from the deal after its advisers said the merger didn’t free investors from tax liabilities.

Once valued at $32.9 billion, the merger soured on multiple fronts after it was first announced in September. While Williams is likely to appeal, it will have a hard time getting the decision overturned, said Brandon Barnes, a litigation analyst with Bloomberg Intelligence.

“Chancery courts are experts in complex business litigation such as this, and are given considerable deference by the Delaware Supreme Court, which is the next level of review,” Barnes said in a research note Monday.

Williams said in a statement Friday after Glasscock’s ruling that it remains committed to closing the deal and will “enforce its rights” under the terms of its agreement if Energy Transfer attempts to terminate the pact. Williams may seek to extend the merger’s Tuesday deadline, Barnes said.

Williams shares were down 3.2 percent to $20.62 at 11 a.m. Monday in New York trading. Energy Transfer units were up 1.2 percent to $14.

The collapse in crude prices dragged the market value of both companies down by more than a third, straining the relationship between the two and throwing into question the economics of their deal.

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