Under the new deal, Southern Union shares are valued at $40 a share, higher than Energy Transfer's mid-June bid of $33 a share, and above a competing offer from Williams (WMB - Get Report) of $39 a share.
Southern Union shareholders can elect to exchange their common shares for $40 of cash or 0.903 Energy Transfer common units. The maximum cash component is 60% of the total consideration and the common unit component can fluctuate between 40% and 50%, the companies said in a statement Tuesday.
The total value of the deal, approved by the boards of both companies, is about $8.9 billion, including debt."We have listened to SUG shareholders and are providing a superior yet simpler transaction, including a significant cash component and the opportunity to benefit from ETE's upside through the ownership of ETE common units," said Kelcy Warren, ETE's chairman and largest unitholder. "The revised ETE/Southern Union agreement delivers superior value, highly compelling equity participation and certainty to close for SUG shareholders." Southern Union shares closed Friday at $40.37. -- Written by Joseph Woelfel
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