(Reuters) - Energy Transfer Equity LP confirmed it had made a $48 billion unsolicited bid for natural gas pipeline company Williams Companies Inc (NYSE:WMB), hours after Williams rejected the offer as significantly too low.
Energy Transfer Equity (ETE), an energy assets portfolio company, said its all-stock offer of 0.9358 shares per Williams' share represented a 32 percent premium to the stock's closing price of $48.34 on June 19.
Williams said in a statement on Sunday that the unsolicited proposal had prompted it to launch a review of strategic alternatives, with the assistance of Barclays (LONDON:BARC) and Lazard, but the current offer "significantly undervalues" the company.
ETE said its offer is contingent on the termination of Williams' pending purchase of Williams Partners, which gathers, processes and transports natural gas.
ETE made multiple attempts over almost six months to talk to senior management at Williams about a merger and made an initial offer on May 19, six days after the pipeline company said it would buy Williams Partners for $13.8 billion.
The deal is valued at $53.1 billion, including debt and other liabilities, and would be tax-free to Williams' stockholders, ETE said in a statement.
The deal value of $48 billion is based on the number of Williams' shares outstanding as of April 27.
Williams could not be reached for comment outside regular U.S. business hours.
A person familiar with the matter confirmed to Reuters on Sunday that ETE was behind the offer for Williams Co.
Shares of ETE closed at $68.39 on the New York Stock Exchange on Friday, having risen 19.2 percent this year.
Williams shares were up about 7 percent this year, as of Friday's close.