Andrew Linden
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ETE and WMB merger difficulties

Energy Transfer Equity stock rose by 9.26% to $9.79 on heavy trading volume on Monday afternoon, as the pipeline company's lawyers might be unable to deliver a tax opinion required for its proposed takeover of rival Williams Cos. (WMB).

Energy Transfer said on Monday that Latham & Watkins LLP refused to deliver “721 Opinion” on the merger, which contends that the merger qualifies as an exchange offer under Section 721 (a). It will free up the companies’ shareholders from the tax liabilities. However, according to the US Securities and Exchange Commission (SEC) filing, the law firm said that if the deal were to be closed on issue of the prospectus, it would not be able to deliver the opinion. The merger does not qualify as “reorganization,” it believes.

After discussing the issue with its legal advisors, Williams Companies Inc. said it disagrees with Latham & Watkins and Energy Transfer. The company believes the merger still qualifies as an exchange offer. According to Bloomberg, which cited an analyst at Stifel Nicolaus & Co., the tax opinion “muddies the waters.” With a rocky start, the deal is now facing a lot of hurdles. Source: Bidness

The merger between the two energy giants is now subject to approval from Williams Companies’ shareholders and regulatory authorities. If Williams Companies breaks the deal, it would have to pay $1.48 billion to Energy Transfer. 

It's a really complex and difficult deal for both companies and it seems it's becoming more and more complicated. Do you think companies are able to close this deal soon?