After being an attractive takeover or merger target, the phonelines to Las Vegas-based Southwest Gas Corp. from prospectivesuitors are idle.

In response to a local reporter’s question, Southwestpresident/CEO Michael Maffie said no one has talked to the $1billion (revenues) local gas distribution company since the bottomfell out of its merger plans with ONEOK, the Oklahoma-based gasutility holding company. Several major lawsuits were filed overlast year’s failed merger attempts — first with ONEOK, a desiredpartner, and second with an unwanted partner, Southern Union.

Southwest’s operations in Nevada, Arizona and some of the moresparsely populated desert and mountain areas of California haveremained unchanged and the merger failure has generally not beennoticed by the company’s 1.3 million customers, a Las Vegas-basedspokesperson, Roger Buehrer, said Wednesday. “Even when the mergerwas active, it was virtually invisible to the customers and to ouroperating divisions,” he said. “It was really focused only on thekey officers involved.”

Since the first of the year, Southwest Gas has filed lawsuitsagainst ONEOK of Tulsa, alleging “breach of contract, breach of theimplied covenant of good faith and fair dealing and fraud” inseveral areas including the cancellation of the proposed mergercontract, and against Southern Union Co., of Austin, TX, seekingunspecified damages related to its attempts to block the proposedONEOK combination.

While the court process is expected to take at least two yearsif not longer, Southwest Gas, the fastest growing LDC in thenation, adding customers at an average of 5% increase annually forthe past five years, has told its shareholders that the company is”well positioned” to go it alone in the future or to strike up astrategic alliance. The latter is not likely to happen before thecourt actions are settled or concluded.

With residential and commercial customer growth continuing at astrong pace and the construction of several new merchant powerplants fueled by natural gas planned in both Nevada and Arizona,Southwest has said it can “succeed through internal growth or joinwith another company if that makes more sense for shareholders,”Maffie said in this year’s annual report.

He also has not tried to hide the bitterness left by the failedmerger, calling it a “huge disappointment,” following Arizonaregulators’ delaying a decision on the merger, prompting ONEOK tocancel the deal. Nevada regulators earlier in 1999 had approved themarriage. Then Southern Union came in with its unsolicited offer,and Southwest rejected that in favor of ONEOK.

Richard Nemec, Los Angeles

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