Disappointed by Southwest Gas’ board of directors’ decision toaccept Oneok’s $30/share merger offer over its own $32/share offer,Southern Union decided to up the ante late Tuesday by increasingits bid to $33.50/share. With the increase, Southern Union’s offernow 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 valueSouthwest. We think it is a good fit with us and we won’t let it gowithout trying everything possible,” said George Yankowski, aSouthern Union spokesman.

Along with the added dollar amount, Southern Union said itanswered the regulatory issues that caused Southwest to choseOneok. “Basically, we will pay Southwest shareholders from themiddle of February 2000 until closing, if the deal has not beenclosed by that point,” Yankowski said. “All we want is an immediatemerger agreement.”

Southern Union said it will pay interest which, together withdividends, will provide Southwest shareholders with a 6% annualrate 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 resourcesand the commitment to see this transaction through expeditiously.Over a period of months, we have provided appropriate responses toevery reasonable issue raised by Southwest’s management related tothis transaction.Based on advice from regulatory counsel, SouthernUnion believes we will be able to receive regulatory approvals inthe same timeframe as Oneok,” said George Lindemann, CEO ofSouthern Union.

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

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.