A bidding war is breaking out in the oil industry

There’s a bidding war starting in one segment of the energy industry:

Williams, a provider of natural gas pipelines, announced Sunday that it turned down a buyout offer for $US64 a share from Energy Transfer Equity.

In a report Tuesday, the Wall Street Journal’s Alison Sider wrote that this is an indication that a scramble for mergers and acquisitions in the pipeline space is coming.

The Journal notes that energy companies have been on the prowl for their cheaper competitors, but many companies have turned down offers hoping to find higher ones.

Also, the oil crash has not impacted pipeline company earnings the same way it has affected drillers, making companies like Williams a little more attractive.

Investors took the news of a possible Williams deal well. The stock surged 26% on Monday, closing at an all-time high of $US60.90 per share; shares are now 35% higher year-to-date.

Energy Transfer Equity has been after Williams for the last six months according to The Journal reported, and its latest offer was dependent on Williams’ completion of its of planned acquisition of its Williams Partners subsidiary for $US13.8 billion.

And after the unsolicited offer, Williams said it will continue to explore “strategic alternatives” for a possible merger.

Head over to the Wall Street Journal for the full story ยป

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