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Southern Union Increases Its Southwest Gas Offer

Southern Union Increases Its Southwest Gas Offer

Disappointed by Southwest Gas' board of directors' decision to accept Oneok's $30/share merger offer over its own $32/share offer, Southern Union decided to up the ante late Tuesday by increasing its bid to $33.50/share. With the increase, Southern Union's offer now exceeds Oneok's by $108 million, Southern Union said.

"We were so disappointed that the board chose Oneok over us, even though our $32/share offer was $60 million more. We value Southwest. We think it is a good fit with us and we won't let it go without trying everything possible," said George Yankowski, a Southern Union spokesman.

Along with the added dollar amount, Southern Union said it answered the regulatory issues that caused Southwest to chose Oneok. "Basically, we will pay Southwest shareholders from the middle of February 2000 until closing, if the deal has not been closed by that point," Yankowski said. "All we want is an immediate merger agreement."

Southern Union said it will pay interest which, together with dividends, will provide Southwest shareholders with a 6% annual rate of return, based on Southern Union's $33.50/share offer, commencing February 15, 2000 until the close of the merger.

"There's no question Southern Union has the financial resources and the commitment to see this transaction through expeditiously. Over a period of months, we have provided appropriate responses to every reasonable issue raised by Southwest's management related to this transaction.Based on advice from regulatory counsel, Southern Union believes we will be able to receive regulatory approvals in the same timeframe as Oneok," said George Lindemann, CEO of Southern Union.

Neither Oneok nor Southwest could be reached for comment before press time. Southwest's board announced its decision to accept Oneok's offer earlier this week (See Daily GPI, April 27).

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