Energy Transfer Equity Confirms Proposal to Merge with Williams
Transaction would transform the U.S. midstream sector, creating one of the largest U.S. energy groups
Williams stockholders would receive shares issued by new ETE C-corp
Proposal offers 32.4% premium to Williams stockholders with a high degree of transaction certainty
Transaction would be compelling to all stakeholders
ETE initially made its offer in a letter dated
Under its merger proposal, ETE would acquire all of the outstanding
common stock of Williams at an implied price of
ETE has made multiple attempts over an almost 6-month period to engage
in meaningful, friendly dialogue with the senior management of Williams
regarding a proposed merger. As a result of the announcement of the
In addition, ETE stated in its proposal that it did not foresee any regulatory impediments to a merger with Williams and that ETE would accept the regulatory risk related to the closing of the merger. Moreover, ETE has noted that there would be no requirement for an ETE unitholder vote, providing additional deal certainty to Williams stockholders. ETE’s offer is conditioned on the termination of the WPZ merger agreement pursuant to its terms.
ETE is disappointed that, despite the best of intentions and its efforts to reach a friendly, negotiated combination, it is forced into a position to publicly confirm its offer for Williams. Unfortunately, until Williams’ announcement today, Williams’ management has inexplicably ignored ETE’s efforts to engage in a discussion with Williams regarding a transaction that presents a compelling value proposition for its stockholders. After the WPZ merger announcement, ETE believed that it had no other choice but to provide the detailed terms of its interest to the Williams Board. ETE did that and, for the last five weeks, it has been waiting to commence a constructive and open dialogue. Now that Williams has finally responded, ETE intends to engage with Williams to the extent that Williams undertakes a fair and even-handed process.
ETE believes that a merger with Williams and adding WPZ to its family of
partnerships would create significantly more value to the Williams
stockholders than the proposed merger of Williams and WPZ. As part of
ETE’s proposal, WPZ would retain its current name and remain a publicly
traded partnership headquartered in
ETE believes there are numerous meaningful benefits to all parties from a proposed combination of ETE and WMB:
WMB Stakeholders
-
A compelling alternative to the proposed Williams/WPZ merger
(following the announcement of which Williams’ stock price has fallen
to below pre-announcement levels) that provides Williams stockholders
with:
-
a
$64 per share offer price, representing a significant premium of 32.4% to Williams’ closing trading price as ofJune 19, 2015 ; -
a dividend per share that would exceed the dividend per share that
Williams has forecasted Williams stockholders would receive on a
standalone basis and on a pro forma basis for the proposed
Williams/WPZ merger, as outlined in Williams’
May 13th merger announcement; - dividend growth far superior to that of Williams on a standalone basis or on a pro forma basis for the proposed Williams/WPZ merger;
-
a
-
Williams stockholders would receive common shares in
ETE Corp that would have the same economic attributes as ETE common units, which is a currency that continues to be the best performing large cap company in the sector, driven by ETE’s successful track record of operational execution and growth. -
the exchange of Williams shares for
ETE Corp shares would be tax free to Williams stockholders; -
Williams stockholders would benefit from the cash flow diversification
associated with being part of the world’s largest energy
infrastructure group and the third largest energy franchise in
North America , underpinned by three of the largest and most highly respected investment grade MLPs in the industry (ETP, SXL and WPZ); - the combination would create a truly unique and diversified collection of compatible businesses that will drive more near- and long-term value for all stakeholders;
- ETE would become co-obligor of Williams’ existing debt which should maintain the credit profile of Williams’ existing debt, and Williams’ credit facility would be terminated at closing; and
-
ETE Corp shares will have tremendous liquidity and a strong growth profile.
WPZ Stakeholders
- WPZ unitholders will not incur any adverse tax consequences as a result of a combination of Williams and ETE as compared to potential significant adverse tax consequences for many WPZ unitholders if the proposed Williams/WPZ merger is completed;
- there is no expected impact to WPZ’s credit ratings as a result of the ETE/Williams combination;
-
WPZ unitholders will be able to realize material upfront cost savings
and synergies because WPZ will join the
Energy Transfer shared service model that we believe will result in more distributable cash flow for WPZ; -
the combination will create new commercial opportunities for WPZ,
including the potential to acquire assets from the overall
Energy Transfer group, that will improve WPZ’s business outlook and performance; - WPZ unitholders will benefit from having a general partner, ETE, that will be in a position to be able to help WPZ fully realize its long-term growth potential; and
-
WPZ will receive the benefit of a
$410 million break-up fee upon the termination of its merger agreement with Williams.
ETE Stakeholders
- A combination of ETE and Williams is immediately accretive to distributable cash flow for ETE and will take ETE to the next level in terms of cash flow diversification and improved credit profile;
-
ETE’s distribution growth rate will continue to remain best in class
and ETE believes that the duration of that leading performance will be
longer as a result of merging Williams into the
Energy Transfer family; -
the transaction creates the world’s largest energy infrastructure
group and the third largest energy franchise in
North America ; -
the number of opportunities to migrate assets within the
Energy Transfer family and find new commercial opportunities within the expanded asset base will increase significantly. These types of opportunities will create more value for ETP, SXL, WPZ and SUN, and as a result, more cash flow growth for ETE in the future; -
the ability of ETE to broaden its overall spectrum of institutional
investors through the
ETE Corp structure; and -
the creation of
ETE Corp should result in increased liquidity for ETE unitholders because of their ability to elect, after completion of the combination with Williams and ETE and at their option, to exchange ETE common units for common stock inETE Corp.
Although ETE intends to pursue its proposal, there can be no assurance that any transaction with Williams will be consummated.
Forward-looking Statements
This communication may contain forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding ETE’s offer to acquire Williams, its expected future
performance (including expected results of operations and financial
guidance), and the combined company's future financial condition,
operating results, strategy and plans. Forward-looking statements may be
identified by the use of the words "anticipates," "expects," "intends,"
"plans," "should," "could," "would," "may," "will," "believes,"
"estimates," "potential," "target," "opportunity," "designed," "create,"
"predict," "project," "seek," "ongoing," "increases" or "continue" and
variations or similar expressions. These statements are based upon the
current expectations and beliefs of management and are subject to
numerous assumptions, risks and uncertainties that change over time and
could cause actual results to differ materially from those described in
the forward-looking statements. These assumptions, risks and
uncertainties include, but are not limited to, assumptions, risks and
uncertainties discussed in the most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q for each of ETE, ETP and SXL filed
with the U.S. Securities and Exchange Commission (the "
Additional Information
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended. This
communication relates to a proposal which ETE has made for a business
combination transaction with Williams. In furtherance of this proposal
and subject to future developments, ETE and ETE Corp. (and, if a
negotiated transaction is agreed, Williams) may file one or more
registration statements, proxy statements or other documents with
the SEC. This communication is not a substitute for any proxy statement,
registration statement, prospectus or other document ETE,
ETE and its directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding the directors and officers of ETE’s general
partner is contained in ETE’s Annual Report on Form 10-K filed with the
ETE Exchange Offer
This communication is not a substitute for any registration statement,
prospectus or other document
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Source:
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