TULSA, Okla., Aug. 16, 2011 /PRNewswire/ -- Williams (NYSE:
WMB) today affirmed its strong interest in acquiring Southern Union
Company (NYSE: SUG) for $44.00 per
share in cash. Williams conveyed its proposal via a letter to
the Special Committee of Southern Union's Board of Directors.
Williams' all-cash proposal represents value certainty of
$44.00 per share to Southern Union
shareholders. The Williams proposal represents a premium of
4% over the implied value of the agreement with Energy Transfer
Equity, L.P. (NYSE: ETE) of $42.32
based on the closing price of Energy Transfer units on Tuesday, August 16, 2011, assuming Southern Union
shareholders elect the maximum cash percentage under that
agreement. Williams' proposal also represents a material premium to
the implied value of the Energy Transfer deal based on any recent
average trading price of Energy Transfer units, including one-week,
one-month, three-month, six-month and one-year averages.
"Forty-four dollars a share, cash,
for every shareholder is a superior offer for Southern Union's
shareholders," said Alan Armstrong,
president and chief executive officer. "Southern Union's current
agreement with Energy Transfer includes illiquid partnership units
whose value will be exposed to equity markets in the months until
closing and beyond.
"Williams' due diligence is complete, we have reviewed Southern
Union's recent 10-Q and we have evaluated the market conditions and
environment. We are ready and excited to move forward quickly to
sign a definitive merger agreement and combine Southern Union with
Williams," he said.
"Southern Union is an excellent strategic fit with Williams. We
are confident that Williams' acquisition of Southern Union will
immediately increase our cash flows, support our commitment to
high-dividend payouts and drive long-term growth. It also allows us
to maintain our financial flexibility and commitment to
investment-grade credit," Armstrong said.
The Williams proposal is not subject to any financing
conditions. Williams has delivered bank financing commitments to
finance the all-cash purchase price to be signed concurrent with
signing the merger agreement.
Williams remains committed to take all necessary actions to
obtain federal antitrust clearance and will provide the same degree
of regulatory certainty as contained in the second amended Energy
Transfer agreement.
The text of the letter Williams delivered today to the Special
Committee of the Southern Union Board of Directors follows:
August 16, 2011
The Special Committee of the Board of Directors of Southern
Union
Williams is today affirming its strong interest in acquiring
100% of the issued and outstanding common stock of Southern Union
at a purchase price of $44.00 per
share, payable in cash.
We are confident that both you and Southern Union shareholders
will conclude that our $44.00-
per-share, all-cash proposal is superior to your proposed
transaction with Energy Transfer.
- The Williams all-cash proposal represents certain value of
$44.00-per-share to Southern Union
shareholders, which represents a premium of 4% over the implied
value of the Energy Transfer agreement of $42.32, assuming Southern Union shareholders
elect the maximum cash percentage under that agreement.
- Williams remains committed to take all necessary actions to
obtain federal antitrust clearance and will provide the same degree
of regulatory certainty as contained in the second amended Energy
Transfer agreement.
The recent equity market volatility further highlights the
benefits to the Southern Union shareholders of our all-cash
proposal. As you know, Energy Transfer shares last week
traded as low as $33.21, implying a
transaction value for Southern Union of $39.83. We expect that your shareholders
will greatly appreciate the certainty provided by our offer, which
represents a material premium to the implied value of the Energy
Transfer deal based on any recent average trading price of Energy
Transfer units, including one-week, one-month, three-month,
six-month and one-year averages.
We have attached a proposed merger agreement that is
substantially similar to the revised merger agreement with Energy
Transfer with revisions to reflect our all cash purchase price.
We are prepared to immediately execute the merger agreement,
subject to our receipt and review of the disclosure schedules.
We are simultaneously providing the Special Committee's
advisers a copy of our bank financing commitment papers and
disclosure schedules to the merger agreement.
Williams is a disciplined buyer; the clarity and fairness of the
process leading up to signing a definitive merger agreement and
combining our companies is paramount. We must be assured that
the Special Committee, with the assistance of its independent
advisers, assumes responsibility for negotiating the terms of all
agreements with potential acquirers. As well, the Special Committee
must ensure that Southern Union discloses all arrangements or
amendments to arrangements in place between Southern Union and
Energy Transfer or any of their respective affiliates, officers or
directors. We also would expect assurance that the Special
Committee would prohibit all such arrangements in the future. The
draft merger agreement attached to this letter contains provisions
to this effect.
We are confident that you will act quickly to deliver superior
value to Southern Union shareholders.
Very truly yours,
/s/ Alan Armstrong
Alan Armstrong
President and Chief Executive
Officer of Williams
Barclays Capital and Citigroup are serving as financial advisers
to Williams and Cravath, Swaine & Moore LLP and Gibson, Dunn & Crutcher LLP are serving as
its legal advisers.
About Williams (NYSE: WMB)
Williams is an integrated natural gas company focused on
exploration and production, midstream gathering and processing, and
interstate natural gas transportation primarily in the Rocky
Mountains, Gulf Coast, Pacific Northwest, Eastern Seaboard and the
Marcellus Shale in Pennsylvania.
Most of the company's interstate gas pipeline and midstream assets
are held through its 75-percent ownership interest (including the
general-partner interest) in Williams Partners L.P. (NYSE: WPZ), a
leading diversified master limited partnership. More
information is available at www.williams.com. Go to
http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our
e-mail list.
Portions of this document may constitute "forward-looking
statements" as defined by federal law. Although the company
believes any such statements are based on reasonable assumptions,
there is no assurance that actual outcomes will not be materially
different. Any such statements are made in reliance on the "safe
harbor" protections provided under the Private Securities Reform
Act of 1995. Additional information about issues that could lead to
material changes in performance is contained in the company's
annual reports filed with the Securities and Exchange
Commission.
MEDIA CONTACTS:
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Julie Gentz
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Joele Frank / Andrew
Siegel
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Williams
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Joele Frank, Wilkinson Brimmer
Katcher
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(918) 573-3053
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(212) 355-4449
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INVESTOR
CONTACTS:
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Travis Campbell
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Sharna Reingold
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David Sullivan
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Tom Gardiner
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Williams
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Williams
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Williams
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Georgeson, Inc.
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(918) 573-2944
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(918) 573-2078
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(918) 573-9360
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(212) 440-9872
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SOURCE Williams