BMO Sees Williams (WMB) Raising Bid for Southern Union (SUG) to Low-to-Mid $40/Share Range

Carl Kirst, an analyst at BMO, said Wednesday a counter bid for Southern Union (NYSE: SUG) is highly likely. Kirst sees Williams Companies Inc. (NYSE: WMB) raising its all cash offer to a low-to-mid $40 per share range.

BMO believes a $44 per share cash bid for Southern Union could add up to 5-7 percent to Williams' earnings. If Williams funds the purchase by selling or dropping its midstream & pipe assets to Williams Partners (NYSE: WPZ) -- which the firm believes is most likely -- an additional 15 percent could be added to earnings.

The analyst comments come on the heels of what has turned out to be a bidding war for Southern Union. On June 16 Energy Transfer Equity, L.P. (NYSE: ETE) offered the company $33 per share, or about $4.2 billion. Seven days later, Williams Companies made a $39 per share cash offer for Southern Union Company.

Since the bidding war has begun, shares of Southern Union are trading up 46 percent since mid June. The stock is up $0.02, or 0.05 percent, to $42.09 Wednesday afternoon.

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