Court says ETE can walk away from $20bn Williams takeover
A Delaware judge ruled that Energy Transfer, ETE, had not breached the merger agreement when in March it cited a tax problem that would prevent the deal from closing by the agreed upon termination date. Under the terms of the deal, if the deal is not completed by June 28, ETE can walk away without penalty.
Williams said in a statement that it disagreed with the judge's ruling and will take "appropriate actions to enforce its right." It said in a brief filed with the court earlier this week that it would appeal any ruling in favor of ETE.
Williams' shareholders are set to vote on Monday - a day before the deal's deadline. The company said its board still recommends shareholders vote for the deal.
The two companies sued each other in Delaware Chancery Court in May after months of heated disagreement. ETE had been trying to back out of a deal that had become less attractive in the wake of oil price fluctuations and a decline in its share price.
ETE argues that it is not able to close the deal because its tax advisers at Latham & Watkins could not determine that the deal would be tax-free, as anticipated when the agreement was originally signed. ■