The filing of its recent lawsuit appears to make it clear, at least on the surface, that The Williams Cos. Inc. is intent on forcing Energy Transfer Equity LP to complete its merger, which is essentially the acquisition of Williams.

Less clear is why the company so strongly desires the deal to go through, or whether the suit is a bargaining tactic.

“The Williams board is unanimously committed to enforcing Williams’ rights under the merger agreement entered into with ETE on Sept. 28, 2015, and to delivering the benefits of the merger agreement to Williams’ stockholders,” the company said in a statement. “This action was filed with that goal in mind. The Williams board has not changed its recommendation ‘for’ the merger agreement executed on Sept.28, 2015.”

Fair enough; a deal’s a deal. But is it still a good deal for Williams and its shareholders?

Baird Energy Research analysts expressed doubts in a research note released on May 16.They pointed out that “arbitrage now sits at [about] 29% … with arbitrageurs already having fled the trade and the stocks trading as if the merger is dead.”

The Williams lawsuit, filed on May 13, asks the Delaware Court of Chancery to issue a declaratory judgment and ensure that Energy Transfer completes the transaction by keeping it from walking away after the current “outside date” of June 28 or by using the lack of a Section 721(a) tax opinion from its counsel, Latham & Watkins LLP.

Baird doesn’t see that happening.

“We think it’s unlikely that a judge would force ETE to ignore a key and per se provision of the merger agreement,” it wrote, “and equally unlikely that a judge would force a law firm to render a legal opinion to satisfy such a provision.”

The statement continues, “Williams alleges that ETE has breached the merger agreement through a pattern of delay and obstruction designed to allow ETE to avoid its contractual commitments. Williams believes that the merger agreement prevents ETE from doing so.”

Both Williams and Energy Transfer agreed to use Latham to render an opinion on whether certain elements of the transaction would be subject to taxes. Since the deal was struck last September, the sharp decline in Energy Transfer’s unit price has complicated matters, making it more difficult for Latham to issue an opinion that, based on federal law, the acquisition would be tax-free.

Energy Transfer issued a statement of its own, insisting that “before this suit was filed, we were making progress towards clearing all SEC [Securities and Exchange Commission] comments and believe we were close to finalizing the proxy statement/prospectus for the Williams stockholder meeting to vote on the merger.”

The result is the spectacle of the corporate equivalent of an engaged couple in the midst of a loud, public argument and calling in lawyers … while insisting that they want the marriage to take place.

“The relationship has turned very acrimonious, suggesting an integration of the two companies would be difficult and questioning the value in taking extraordinary steps to force the merger closure,” wrote Mark Holder of Tulsa, Okla.-based Stone Fox Capital in a note published on the Seeking Alpha website.

Holder believes Williams executives are trying to wrangle a better deal or a fee from Energy Transfer for walking away. He doubts Williams can deliver benefits to shareholders, though.

“At this point, the clear preferred investment is directly in Williams or Williams Partners with some sweetener from ETE to go away,” he wrote. “The stock is very attractive as the company has growth projects, cost reductions and improving market conditions that might sustain the dividend at an extremely high level. What shareholders don’t want is a completion of this merger and a position in a junior security like ETC [Energy Transfer Corp.]”

Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.

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