Williams Companies and Energy Transfer Equity are in the process of merging, but they're also in a legal battle.
Tulsa-based Williams has filed lawsuits against Energy Transfer Equity and its chairman, Kelcy Warren, The Journal Record’s Sarah Terry-Cobo reports:
Williams alleges Energy Transfer Equity and Warren violated the merger’s terms by issuing series A convertible preferred units on March 9, according to a Wednesday regulatory filing. The offering gives some Energy Transfer Equity investors preferential treatment on the company’s distributions. The Williams board still recommends shareholders vote in favor of the deal. The company filed two lawsuits, one against Energy Transfer and one against Warren, to protect shareholder interests, according to Williams’ filing. “Williams remains committed to working with ETE to ensure the financial strength of the combined company, provided that all ETE and Williams investors are treated fairly and equitably,” according to the document.
But University of Central Oklahoma finance professor Stuart MacDonald said it’s not a sign the deal will fall apart, saying the lawsuits could be a precautionary move.
From Terry-Cobo:
In any merger, the company being acquired faces the risk shareholders will sue after a deal is done. Even if the court says that Energy Transfer’s agreement doesn’t create a disadvantage for William’s shareholders, the lawsuit isn’t for naught, he said. Williams has satisfied the need to protect stockholders. “But you can be real sure Williams’ board, its legal and financial advisers, are all aware of their duty to get the best possible deal for shareholders and are going to try to accomplish that,” he said.
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