Energy Transfer Equity, which earlier this week said it continues to pursue if proposed acquisition of Williams, said Thursday it has entered into a confidentiality agreement with Williams to pursue the Oklahoma pipeline company’s strategic alternatives process.

“ETE [Energy Transfer Equity] is looking forward to engaging with Williams and working toward a transaction that will deliver compelling value to both companies’ stakeholders,” said Energy Transfer spokeswoman Vicki Granado.

Last month, Williams rejected Energy Transfer’s unsolicited bid worth roughly $53 billion, saying the offer “significantly undervalues” the midstreamer, which has 33,000 miles of pipeline from the Gulf of Mexico to Canada, Kallanish previously reported.

In response to the bid, Williams said it was opening itself up to alternatives that could include a sale or merger. Another option would be for the Tulsa, Oklahoma-based energy company to move forward with its $13.8 billion plan to purchase the remainder of its own master limited partnership, Williams Partners, to fold it into a single company.

While Energy Transfer has agreed to enter into the auction process, it hasn’t given up its right to make a hostile bid, according to published reports. The confidentiality document signed by Energy Transfer “has no such ‘standstill’ clause preventing it from pursuing a deal outside the auction,” according to Bloomberg.

Energy Transfer said it wants to keep Williams separate and operate it as a controlled master limited partnership (MLP) along with its other standalone assets such as Sunoco Logistics Partners.

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