(Adds details from the ISS report, background of the
transaction)
By Michael Flaherty
June 15 (Reuters) - An influential shareholder advisory firm
recommended on Wednesday that Williams Co Inc WMB.N
stockholders vote in favor fellow pipeline company Energy
Transfer Equity LP's ETE.N takeover bid, a deal that has been
in doubt for months.
Williams shareholders are scheduled to vote on the deal on
June 27. Under the current terms, the merger must close by June
28, or the agreement expires.
Williams has accused Energy Transfer of trying to break the
cash-and-stock deal. With the drop in oil prices, its value has
plunged to about $20 billion from $33 billion when the companies
reached an agreement in September, ending a pursuit that began
in January 2015.
ISS said a better alternative for Williams shareholders
might be to convert some of the cash component into equity at an
appropriate exchange ratio, given the decline in commodity
prices.
"Even many of the legitimate causes for concern ... appear,
on closer examination, known or manageable risks," ISS said in
the report.
The merger was intended to create more stability for both
companies in the face of low oil prices.
The companies are set to face off in Delaware Chancery Court
on Monday over tax issues that Energy Transfer says are hobbling
the deal, as well as claims by each party that the other had
broken its contact.
(Additonal reporting by Amrutha Gayathri in Bengaluru; Editing
by Saumyadeb Chakrabarty and Lisa Von Ahn)