With five weeks left before the deadline for the merger between Energy Transfer Equity (NYSE: ETE) and Williams (NYSE: WMB) the conflict over the deal’s terms has entered the home stretch.

It did so in traumatic fashion for ETE investors Wednesday, their units’ price dropping 9% on the day after Williams scheduled its shareholders’ vote on the merger for June 27, the day before the drop-dead date past which either party can walk away without penalty.

Crucially for Williams, the vote is now likely to take place after the conclusion of the expedited trial in Delaware Chancery Court over the parties’ cross-complaints, now set for June 20-21. That means Williams shareholders should know whether they’re voting on the original deal or the significantly worse one now on offer from ETE following its March private offering, which deferred distributions to insiders on highly preferential terms.

This has in turn caused the discount on WMB’s share price relative to ETE’s offer to shrink significantly over the last week, just as we predicted it ought to in our last update. The fact that the arbitrage spread has narrowed mostly at the expense of ETE’s share price doesn’t change the view here that both equities are now far too cheap relative to fundamentals as well as comparable rivals.

Expect a lot more volatility over the next month: the game of chicken is never scarier than just before it’s over. We continue to expect that it will end not with a crash but with a sigh of relief as the uncertainty over lawsuits abates and those attractive fundamentals come into sharper focus.

Growth pick ETE remains our #1 Best Buy below $15; WMB is a Buy below $23 in the Aggressive Portfolio.