Energy Transfer Equity (ETE) Stock Gains, Williams Cos. Open to New Offer
NEW YORK (TheStreet) -- Shares of Energy Transfer Equity (ETE) are rising by 7.13% to $12.47 in early afternoon trading on Tuesday, as Williams Cos. (WMB) is open to revising the terms of the companies' planned $20 billion merger, sources told Reuters.
Investors have been unsure whether the deal will close, as Williams Cos. claims that Energy Transfer has been attempting to terminate the agreement and both companies sue each other.
The transaction has become less appealing as oil prices have tumbled, leading Energy Transfer to warn that it may be unable to close the deal in its current form due to a tax issue. Williams Cos. consequently sued.
Williams Cos. will consider a proposal that would replace the $6 billion cash portion of the transaction with shares of Energy Transfer Corp., a new company created for the deal, Reuters reports.
"Absent a substantial restructuring of this transaction, which Energy Transfer has been very willing and actually desiring to do, absent that, we don't have a deal," Warren said on an ETE earnings call in early May, Reuters adds.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Energy Transfer's strengths such as its increase in net income, good cash flow from operations and impressive record of earnings per share growth are countered by weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
You can view the full analysis from the report here: ETE
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
