Two months after it first gave notice that it was reviewing alternatives, Westar Industries Inc., a subsidiary of Topeka-based Western Resources Inc. gave Oneok Inc. notice late last week it will sell all of its interests — common and preferred stock — in the Tulsa-based gas distributor.

As a result of the notice, Westar said Oneok, or its designee, has the right to purchase the common stock and preferred stock at a cash sales price of $21.77 per share until the later of Aug. 28 or 30 days from the date of receipt of all necessary regulatory approvals, but no later than Nov. 26. Westar said if ONEOK does not purchase the stock during such period, it can sell the stock within a 16-month period thereafter.

In late April, Westar acknowledged that it was “reviewing alternatives” for changing its investment in Oneok — one of the largest natural gas distribution companies in the nation with more than 1.4 million customers (see NGI, May 13). Western filed the amendment to its Schedule 13D with the Securities and Exchange Commission.

Last month, the company said that it was planning to sell its $960 million stake in Oneok (see NGI, May 27). Westar engaged JP Morgan to advise it in the sale of 4.7 million shares of Oneok common and preferred stock that is convertible into 39.9 million additional shares of Oneok common stock, representing about 44.5% of total Oneok shares.

Westar obtained the share of Oneok in 1997 through a strategic alliance that combined the gas assets of both companies into Oneok. The $660 million transaction moved Oneok into the regional midwestern gas arena and made it the nation’s eighth largest LDC at the time.

Oneok is a midstream gas transporter in the Midcontinent region and the largest natural gas distributor in Kansas and Oklahoma, operating as Kansas Gas Service and Oklahoma Natural Gas. Western Resources has total assets of $6.6 billion, including security company Protection One and electric utility Westar Energy, which serves 640,000 customers in Kansas.

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