Energy Transfer Rejects Williams' Proposals to Resolve Tax Issues


NEW YORK, May 4 (Reuters) - Pipeline company Energy Transfer Equity has rejected two possible solutions that rival Williams Cos Inc hoped would resolve tax issues that Energy Transfer believed threatened their $17 billion tie-up.

Energy Transfer said in a filing with the Securities and Exchange Commission on Wednesday that Williams has proposed two alternative structures for the deal.

Williams believes the new structures would allow Energy Transfer's lawyers to issue a tax opinion that is needed for the deal to close. But Energy Transfer said it does not believe the merger agreement requires it to restructure the deal.

It also said the suggested changes would still create substantial risks of material taxation if the deal is completed.

Williams 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. The companies have yet to schedule a vote of Williams' shareholders that is needed to ratify the deal.

Williams is suing ETE in Delaware to stop a controversial offering of preferred shares to its top shareholders. It has also sued Energy Transfer's Chief Executive Kelcy Warren in Texas over the same offering.

ETE said on Wednesday it has countersued Williams in Delaware, alleging that the company breached its obligations under the merger agreement by blocking a proposed public offering and suing Warren in Texas.

Dallas billionaire Warren set his sights on Williams last year in order to transform his empire into one of the biggest pipeline networks in the world but the timing was poor. A prolonged drop in oil and gas prices made the deal more difficult to finance and to justify to shareholders.

ETE would need to take on a heavy debt load to fund the $6 billion cash portion of the deal.

Representatives for Williams declined to comment.

(Reporting by Michael Erman; Editing by Bernadette Baum)

Copyright 2017 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Environmental Technician / Professional
Expertise: Environmental Engineer
Location: Louisville, KY
Third Party Inspector - Air Compressors | NC | URGENT
Expertise: Client Representative|QA / QC / Inspection
Location: Mocksville, NC
Security Advisor
Expertise: Security
Location: San Ramon, CA
search for more jobs

Brent Crude Oil : $52.72/BBL 3.31%
Light Crude Oil : $48.51/BBL 3.01%
Natural Gas : $2.89/MMBtu 1.36%
Updated in last 24 hours