NEW YORK (TheStreet) -- Shares of Energy Transfer Equity (ETE) are tumbling by 8.85% to $11.12 in late-afternoon trading on Wednesday, as it and rival pipeline company Wiliams Cos. (WMB) will head to a trial over tax issues on June 20.
The companies have also scheduled a shareholder vote on the planned $20 billion merger for June 27, according to an SEC filing.
Only Williams Cos. shareholders need to approve the merger, which can be terminated if it doesn't close by June 28. Williams Cos. has accused its acquirer, Energy Transfer, of stalling.
The lawsuit is an attempt by Williams Cos. to prevent Energy Transfer from ending the merger over a tax issue or the failure to close the deal by the June 28 deadline.
"The motion charges that the ETE defendants 'have, through a pattern of obstructionist conduct and bad-faith delay, been working hard to avoid closing the Proposed Transaction, or, at a minimum, to pressure Williams to restructure the Proposed Transaction on terms that are more favorable for Defendants,'" Reorg Research wrote in a note, Barron's reports.
The companies initially expected the combination would add up to $2 billion in annual pretax earnings, but now expect just $170 million in earnings as lower commodity prices have eroded the deal.
Additionally, Energy Transfer's Form S-4 has been declared "effective" by the SEC, according to a company statement earlier today.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Energy Transfer Equity's strengths such as its increase in net income 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: ET
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.