Once a Coup, Energy Transfer Deal Becomes a Nightmare – CNBC

He doggedly pursued Williams for months, viewing it as the crucial missing piece to his pipeline empire.

“He’s got a great track record. He’s done extremely well in past deals,” said Tom Seng, an assistant professor of energy business at the Collins College of Business at the University of Tulsa. “When he said he was going after Williams, everyone was like, ‘O.K., Kelcy gets what Kelcy wants.’ ”

A mere five months after Mr. Warren closed the acquisition, the deal has become a nightmare.

Shares of both companies have plummeted more than 60 percent and shed a combined $ 37 billion in market value, partly in response to the huge decline in energy prices, but also because of the numerous concerns investors have about the complicated merger. The value of the deal lost nearly $ 1 billion on Thursday after Energy Transfer announced disappointing earnings and the company’s stock dropped to its lowest level since 2009.

And now, behind the scenes, executives at Energy Transfer are suffering from a giant case of buyer’s remorse and frantically searching for a way to pull out of the deal. In recent weeks, the company considered, but never presented, an offer of a one-time payment more than $ 2 billion to Williams to walk away, according to two individuals with knowledge of the discussions who spoke on condition of anonymity because of nondisclosure agreements.

At Williams, led by a disharmonious board that includes two activist hedge fund managers bent on selling the company and a longtime chief executive determined to keep it independent, the deal was hated by many from the start.