Oneok Inc. announced Friday it has reached a definitive agreement to pay Las Vegas-based Southwest Gas Corp. $3 million in settlement of a lawsuit between the two parties. The action was almost the final one in a legal wrangle that has gone on for three years among the two companies and Southern Union. On Wednesday Southwest Gas agreed to pay Southern Union $17.5 million to settle a lawsuit involving Southern Union’s failed plan to buy the gas company (see Daily GPI, Aug. 8).

Southern Union had filed a $750 million suit charging fraud and bad faith breach of contract related to its attempts to purchase Southwest in 1999. Southern Union’s takeover attempt came after Oneok entered into a merger agreement to acquire Southwest in late 1998. Southern Union offered a higher price, which Southwest rejected. At that point Oneok pulled out of the merger agreement with Southwest citing potential lawsuit liability. Southern Union then sued both Southwest and Oneok for fraud and breach of contract and Southwest sued Oneok for breach of contract.

“We are glad to finally resolve three years of litigation with Southwest,” said David Kyle, Oneok’s chairman. “Only one claim by Southern Union arising out of the failed merger transaction remains. Based on rulings to date from the court it is limited to actual damages of less than $1 million and the possibility of punitive damages. A motion for summary judgement is currently pending on that claim.”

Oneok said it would adjust its recently announced earnings for the second quarter from 32 cents per diluted share of common stock to 29 cents to encompass the settlement, along with other litigation costs.

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