Williams Cos. reportedly set to buy Barrett Resources for dlrs 2.3 billion in cash

NEW YORK (AP) _ Williams Companies is in discussions to buy natural gas producer Barrett Resources for dlrs 2.3 billion in cash, according to published news reports. <br><br>The deal would give Williams,

Monday, May 7th 2001, 12:00 am

By: News On 6

NEW YORK (AP) _ Williams Companies is in discussions to buy natural gas producer Barrett Resources for dlrs 2.3 billion in cash, according to published news reports.

The deal would give Williams, a Tulsa, Oklahoma-based energy trader and pipeline operator, a boost, making it a producer and distributor of natural gas, The New York Times reported Monday.

The two companies held talks over the weekend, but it wasn't clear if and when they would reach agreement.

Shell, the United States unit of Royal Dutch/Shell Group, bid dlrs 2 billion in March, prompting Barrett to put itself up for sale in a formal auction.

Shell sweetened its original bid but chose not to participate in the formal bidding after it put Barrett ``in play,'' presumably because it would have had to drop its hostile offer, according to The Wall Street Journal.

Under the terms of the agreement, Williams would pay Barrett shareholders in the low dlrs 70s per share, compared to Shell's dlrs 60 a share offer. The company would also assume about dlrs 300 million in debt. Williams also would likely seek a significant breakup fee in case it eventually loses Barrett to Shell or another suitor.

A Williams spokesman declined to comment, and a Barrett spokesman couldn't be reached for comment.

A spokesman for Shell said it wouldn't comment ``on any rumored transaction until we have seen the details of a formal announcement. However, we are disappointed that Barrett's management refused repeated attempts to meet with us even after our public commitment to negotiate all terms of a friendly transaction, including price.''

Williams was one of a few companies that last week submitted bids for Denver-based Barrett. Williams was forced to disclose its interest in Barrett last week when Wall Street analysts mistakenly were patched into a conference call in which board members were discussing a potential bid.

Barrett is coveted for its significant presence in the Rocky Mountain region, which is becoming increasingly valuable to gas producers because of declining production in traditional markets of Texas and the Gulf of Mexico.

Williams posted 2000 revenue of dlrs 10.4 billion, and its net income in 2000 more than doubled, to dlrs 524.3 million from dlrs 221.4 million.

In 4 p.m. composite trading Friday on the New York Stock Exchange, Williams was up dlrs 1.01 to dlrs 41.67. The company has 1.2 trillion cubic feet of proven natural-gas reserves, mostly in Colorado, New Mexico and Wyoming, and has one of the largest natural-gas pipeline systems in the country, with 11,300 miles (18,200 kilometers) of pipe.