Southwest Gas Corp. has sued Oneok, Inc. and Southern Union Co.following what it called “Oneok’s unjustified attempt to cancel themerger agreement between it and Southwest Gas.”

The lawsuit, filed yesterday in the U.S. District Court for theDistrict of Arizona in Phoenix, seeks unspecified damages fromOneok for breach of contract, breach of the implied covenant ofgood faith and fair dealing, fraud in the inducement, and fraudrelated to its actions connected to the merger agreement and itscancellation of the agreement.

Southwest Gas also has sued Southern Union Co. seekingunspecified damages from Southern Union for breach of contract,breach of the implied covenant of good faith and fair dealing, andinterference with a contract, all related to Southern Union’sattempts to block the proposed Southwest Gas-Oneok combinationafter Southern Union’s unsolicited offer was rejected by SouthwestGas in favor of Oneok’s offer.

The Public Utilities Commission of Nevada, one of three stateregulatory agencies required to approve the merger, votedunanimously last June to approve it. Shareholders of Southwest Gasalso voted nearly 80% in favor of the proposed transaction. Reviewof the merger was originally scheduled to take place last fall bythe Arizona Corporation Commission (ACC), but that decision wasdelayed by ACC concerns about Oneok’s actions and fitness to servein Arizona.

Oneok’s attempt last week (see Daily GPI, Jan. 24) to withdraw its application beforethe ACC has brought the merger effort to a halt, since ACC approval isrequired before consummation of the transaction, Southwest Gas said.

“Southwest Gas has been greatly damaged by the improper conductof both Oneok and Southern Union in this complex year-longprocess,” said Michael O. Maffie, CEO of Southwest Gas. “With thislawsuit, we hope and expect to recover the damages caused by theacts of the two utilities that were competing for our company.”

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