Energy Transfer Equity Misses Estimates For Q2

- Energy Transfer Equity Misses Estimates For Q2



Aug 3, 2011

Energy Transfer Equity (NYSE:ETE) reported adjusted Q2 EPS of $0.30, missing analyst estimates of $0.37 per share. Revenues for the quarter rose 45% year-over-year to 1.62 billion, below consensus estimates of $1.81 billion

Mike Bradley, president and chief executive officer of Regency said, "Regency delivered strong results in the second quarter of 2011, fueled by our acquisition activity over the last year and volume growth in south and west Texas in our Gathering and Processing segment."

Energy Transfer Equity (NYSE:ETE) has a potential upside of 21.4% based on a current price of $40.7 and an average consensus analyst price target of $49.4.

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Energy Transfer, Southern Union Reach $5.7B Deal

- Energy Transfer, Southern Union Reach $5.7B Deal

Tuesday, July 19, 2011
Dow Jones Newswires
HOUSTON
by Ben Lefebvre

Southern Union agreed to a sweetened $5.7 billion cash-and-stock buyout offer from Energy Transfer Equity, spurning a bid from rival suitor Williams Cos.

The agreement is the latest maneuver in a bidding war that has added more than a billion dollars to Energy Transfer's opening $4.2 billion bid for Southern in mid-June. Energy Transfer and Williams have competed to merge their pipeline assets with those of Southern, with the winner expected to become the largest natural gas pipeline operator in the country.

Williams, whose most recent bid was for $5.6 billion on July 14, said it was "evaluating its options."

Enterprise and Williams have hoped that combining their position in prolific natural gas production areas with Southern's access to markets will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in the past decade has unlocked an unprecedented natural gas bounty from shale formations across the U.S.

The combined company will have capacity to move more than 30 billion cubic feet a day of natural gas--nearly half of the natural gas produced in the U.S.--along nearly 45,000 miles of pipeline.

Southern shareholders may have been swayed by Energy Transfer's use of stock in the deal, which would offer tax benefits and dividends, analysts have said. Energy Transfer's assets in Texas might also fit easier with Southern's position in markets in the Midwest and Florida, said Morningstar analyst Avi Feinberg.

"I think Energy Transfer has the best natural fit with Southern Union," Feinberg said in an interview.

Under Energy Transfer's latest offer, Southern Union holders can elect to receive $44.25 in cash or one Energy Transfer Equity common unit, worth $44.03 as of Monday's close. The total value of the deal, including debt assumption, is about $9.4 billion.

Williams may find going above $44 a share problematic, as the amount could be more than Southern might be worth to shareholders, BMO Capital Markets analysts have said.

Energy Transfer on Tuesday also reached an amended agreement to sell Southern Union's 50% interest in Citrus Corp., owner of the Florida Gas Transmission pipeline system, to Energy Transfer Partners LP for $2 billion. Regulators are requiring Energy Transfer Equity to sell the stake when the Southern Union acquisition closes.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Energy Transfer Ups Southern Union Bid

- Energy Transfer Ups Southern Union Bid

Tuesday, July 05, 2011
Energy Transfer Equity L.P.

Energy Transfer Equity and Southern Union have entered into an amended and restated merger agreement under which ETE will acquire SUG for $8.9 billion, including $5.1 billion in cash and ETE common units.

Under the terms of the revised agreement, which has been unanimously approved by the boards of directors of both companies, SUG shareholders can elect to exchange their common shares for $40.00 of cash or 0.903 ETE common units. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration.

The revised purchase price represents a significant increase in value being paid to SUG shareholders and more than a 42% premium to the closing price of SUG common stock on June 15, 2011, the last trading day prior to the announcement of the original merger agreement.

The revised agreement provides, at the SUG shareholders' option, certainty of value through substantial cash consideration per SUG share and significant potential upside from ETE common units at a compelling fixed exchange ratio and on a tax-deferred basis. The merger is not subject to any financing contingency as ETE has secured approximately $3.3 billion in committed financing from Credit Suisse to fund the cash consideration to SUG shareholders.

"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 of the Board of Directors and largest unitholder. "The revised ETE / Southern Union agreement delivers superior value, highly compelling equity participation and certainty to close for SUG shareholders. The Southern Union board and I strongly believe that ETE is the right partner for Southern Union and that the combination of our companies is in the best interests of our investors, customers and employees."

ETE has received signed support agreements from shareholders representing 14% of SUG's total shares outstanding, who will pre-elect to receive ETE common units as their consideration, subject to the same proration as all other shareholders.

George L. Lindemann, Chairman and CEO of SUG, said, "We are pleased to be able to deliver superior value to our shareholders, with greater certainty to close, through this transaction with ETE. This deal creates strategic benefits that could not be achieved through any other industry combination. Our businesses are highly complementary and the combination will provide a broader range of services and market access that our existing and future customers demand."

Eric D. Herschmann, Vice Chairman, President and COO of SUG, added, "Our combination with ETE is the best path forward for this company and our shareholders, who will be able to elect, subject to the proration provision, to exchange their SUG shares for a guaranteed cash payment at closing or opt to participate in the potential upside of the combined companies through long-term equity ownership in ETE."

Prior to receipt of ETE's revised offer, Messrs. Lindemann and Herschmann informed ETE management and a Special Committee of SUG directors that, given their significant combined shareholdings of SUG, they had voluntarily determined to terminate their consulting and non-compete agreements with ETE included in the original merger agreement entered into on June 15, 2011. ETE has accepted the voluntary termination of those agreements.

In a sign of its commitment and confidence that it can complete this transaction in or before the first quarter of 2012, ETE has agreed to divest businesses, to the extent required by regulators, to ensure federal anti-trust approvals for the proposed ETE / SUG transaction will not delay or prohibit the closing. ETE has already begun the approval process with its HSR and Missouri regulatory filings.

In connection with the revised merger agreement, ETE also announced a binding agreement for the drop down of Southern Union Company's 50% interest in Citrus Corp., which owns 100% of the Florida Gas Transmission pipeline system, to Energy Transfer Partners, a publicly traded partnership, for $1.9 billion in cash. The drop down of this interest in Citrus Corp. is subject to the closing of ETE's acquisition of SUG and is not subject to any financing condition on the part of ETP or ETP unitholder approval.

"The drop down of Citrus to ETP allows ETE to deleverage its balance sheet upon closing and provides ETP with an interest in one of the best pipeline systems in the United States," said Mr. Warren.

Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to ETE, with Latham & Watkins LLP, Bingham McCutchen LLP and Potter Anderson having acted as legal counsel. Evercore Partners and Goldman Sachs Group Inc are serving as financial advisors to the Special Committee of the board of directors of SUG. Sullivan & Cromwell LLP and Morris Nichols Arhst and Tunnell LLP are serving as legal advisors to the Special Committee. Locke Lord Bissell & Liddell LLP and Roberts & Holland LLP are serving as legal counsel to SUG.

* Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion


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Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion

- Energy Transfer Raises Its Offering Price for Southern Union to $8.9 Billion



Jul 5, 2011

Energy Transfer Equity, L.P. (NYSE:ETE) raised its offering price for Southern Union Company (NYSE:SUG) today to $8.9 billion, including $5.1 billion in cash and ETE common units.

Under the deal, unanimously approved by the board of directors for Southern Union, shareholders of SUG can elect to exchange their common shares for $40.00 in cash or 0.903 ETE common units.

The new offer is significantly higher than the company's original $33 per share, $7.9 billion offer it made on June 16, and trumps the $8.7 billion cash bid made by Williams Co (NYSE:WMB) on June 24.

Kelcy Warren, ETE's Chairman of the Board said, "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. The revised ETE / Southern Union agreement delivers superior value, highly compelling equity participation and certainty to close for SUG shareholders. The Southern Union board and I strongly believe that ETE is the right partner for Southern Union and that the combination of our companies is in the best interests of our investors, customers and employees."

Energy Transfer Equity has a potential upside of 14.5% based on a current price of $44.68 and an average consensus analyst price target of $51.17.

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Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams

- Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams



Jun 27, 2011

Energy Transfer Equity (NYSE:ETE) said in a letter to Southern Union Co (NYSE:SUG) that it cannot hold deal talks with Williams Companies (NYSE:WMB).

In the letter to Southern Union, Energy Transfer wrote that company's board "is not permitted by the merger agreement to engage in any discussions or negotiations with Williams." It also stated that Southern Union cannot provide nonpublic information to Williams.

The filing also said that Energy Transfer, "does not believe that the board can conclude, in good faith, that the Williams proposal constitutes, or is reasonably likely to result in, a superior offer."

It was also disclosed in a letter from Southern Union that Williams had bid $30 per share for the company in January, an offer that was inferior to one Southern had already received at the time from another, unnamed company.

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Energy Transfer to Buy Southern Union for $4.2B

- Energy Transfer to Buy Southern Union for $4.2B

Thursday, June 16, 2011
Dow Jones Newswires
HOUSTON
by Ben Lefebvre

Energy Transfer Equity (ETE) agreed to buy Southern Union (SUG) for $4.2 billion in a deal that will create the largest natural gas pipeline company in the U.S.

The two companies hope that combining Energy Transfer's position in prolific natural gas production areas with Southern's access to markets will make them better able to transport natural gas through what is becoming an increasingly congested system. The glut has been brought about by new drilling technology, which in the past decade has unlocked an unprecedented natural gas bounty from shale formations across the U.S.

"Energy Transfer has great interstate pipelines and access to key shale plays, but not as much market access as Southern brings to the Midwest and Florida," said Avi Feinberg, an equities analyst with Morningstar Inc.

The combined company will have capacity to move more than 30 billion cubic feet a day of natural gas along nearly 45,000 miles of pipeline. That's nearly half of the natural gas produced in the U.S.

As part of the deal, Energy Transfer Equity will assume $3.7 billion of Southern Union's debt. The new, larger company will have the heft to invest in adding new pipeline capacity, executives said.

The "mind-boggling" levels of natural gas liquids production coming out of the Permian Basin and Eagle Ford Shale areas of Texas has already tied up pipeline systems in the region, Energy Transfer Chief Executive Kelcy Warren said during a conference call with investors.

"I personally see a train wreck if someone doesn't build takeaway capacity in that region very soon," Warren said. "We're committed to doing that."

Energy Transfer plans an additional $1.7 billion in expansion projects, Warren said. After completion of the merger with Southern--expected in the first quarter of 2012--the new company will have access to more shale production areas than any other U.S. pipeline company, Warren said.

Natural gas is trading far below its prices in mid-2008 when the financial crisis crippled industrial demand even as unconventional gas flowed in great quantities from new shale production. Though the price of the commodity is expected to remain low for the foreseeable future, demand is expected to rise significantly. Oil giants, including ExxonMobil and Chevron, have made huge bets on the sector over the past year through acquisitions.

Energy Transfer said it has identified about $100 million in commercial and operational synergies as well as an additional $25 million in one-time savings.

Under the deal, Energy Transfer will issue new Series B units with an implied value of $33 a Southern Union share, a 17% premium to the former's Wednesday closing price.

Southern Union shares surged 17% to $33.11 in early trading. They last traded above the offer price in the middle of 2007, though they have risen 17% so far this year.

Energy Transfer shares rose 6%, to $45.09. The company reported in February its fourth-quarter earnings fell 13% on a surprise drop in revenue because of weakness in its natural-gas operations.

Southern Union reported last month its first-quarter earnings rose 7.4%, beating analysts' estimates, as increased revenue from distribution and the transportation and storage segments helped offset lower margins.

Copyright (c) 2011 Dow Jones & Company, Inc.

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