The Williams Cos. Inc. announced an unsolicited takeover bid of about $4.9 billion Thursday for pipeline company Southern Union Co., which agreed last week to a sale to Energy Transfer Equity LP.
Williams, which also operates gas pipelines, said it would offer $39 per share in cash and top Energy Transfer's bid of $33 per share, or $4.2 billion.
The announcement came after the markets closed and sent Southern Union shares higher after hours.
Southern Union rose 34 cents to $34.15 in regular trading, then jumped $5, or 14.6 percent, to $39.19 in about a half-hour of late trading. Williams shares closed at $29.23, down 9 cents, and fell another 89 cents, or 3 percent, to $28.34 in late trading.
Williams said Southern Union would complement its own business, create a network of nearly 30,000 miles of regulated pipelines and save $50 million a year for the combined companies.
In a letter to Southern Union, Williams CEO Alan Armstrong said financial advisers Barclays Capital and Citi were confident in Williams' ability to finance its all-cash offer.
Williams also said the offer would not affect the timing of its plan to spin off its exploration and production business to Williams shareholders.
If Dallas-based Energy Transfer buys Southern Union, it would create one of the country's biggest natural-gas pipeline companies, with more than 44,000 miles of pipelines. Energy Transfer would assume $3.7 billion in Southern Union debt.
Directors of Energy Transfer and Southern Union approved the sale, but it still faces a vote of Southern Union shareholders and a review by government regulators.