|Southwest Gas Board Unanimously Approves Revised, $30-A-Share Offer From Oneok, Inc.|
Company Rejects Unsolicited Bid From Southern Union, Citing Doubts About Timing and Regulatory Approval
LAS VEGAS, April 26 /PRNewswire/ -- Southwest Gas Corporation (NYSE: SWG) today announced that its Board of Directors unanimously approved a revised offer from Oneok, Inc. (NYSE: OKE) to acquire Southwest Gas for $30 per share in cash, valuing Southwest Gas at approximately $1.8 billion, including assumed debt. In approving the revised agreement, which amends the $28.50-a-share accord reached on December 14, 1998, Southwest Gas said its Board rejected an unsolicited $32-a-share offer from Southern Union Company (NYSE: SUG), citing serious doubts about the likelihood and timing of completion.
Southwest Gas said that after reviewing all available information, it concluded that Oneok should be able to obtain all regulatory approvals and close its purchase of Southwest Gas prior to year-end. In contrast the Southwest Gas Board believes that Southern Union would face a more-protracted and difficult time in obtaining regulatory approvals, extending 18 months or longer.
The Oneok-Southwest Gas combination does not require regulatory approval in any of the states in which Oneok currently operates. Southern Union, meanwhile, would have been required to obtain regulatory approvals from the Missouri Public Service Commission and the Florida Public Service Commission, in addition to regulatory approvals from the states in which Southwest Gas currently operates. Southern Union also would have been required to make regulatory filings with the Securities and Exchange Commission (SEC) under the Public Utility Holding Company Act (PUHCA).
These various approvals, Southwest Gas said, increased the risks of consummation associated with the Southern Union offer. In addition, Southwest Gas said, Southern Union's current capital base, credit ratings and operational history also influenced the Board's decision. "The fact is, the longer the elapsed time for consummation, the greater the uncertainties associated with Southern Union raising the capital to fund the purchase," stated Michael O. Maffie, President and Chief Executive Officer of Southwest Gas. Southwest Gas said its Board also concluded that Southern Union's financial condition raises questions about its ability to finance future growth in Southwest Gas' service territories, the fastest growing in the nation.
Mr. Maffie said, "The Oneok-Southwest Gas combination is the transaction that best serves shareholders because it makes strategic sense -- combining the financial strength of Oneok with Southwest Gas, the country's fastest-growing gas-distribution utility -- and because we believe it can be completed in a timely fashion."
Southwest Gas, which is based in Las Vegas, provides natural gas to approximately 1.2 million customers in Arizona, Nevada and California. Oneok is engaged in natural gas intrastate distribution and transmission, gas processing, gas marketing and gas production. The merger will create the largest stand-alone gas distribution company in the U.S., serving 2.6 million customers in five states. The new company will be the primary gas-distribution company in Arizona, Kansas, Nevada and Oklahoma and also will have a strong presence in the state of California.
Statements contained in this release that include company expectations or
predictions of the future are forward-looking statements intended to be
covered by the safe harbor provisions of the Securities Act of 1933 and the
Securities Exchange Act of 1934. It is important to note that the actual
results of company earnings could differ materially from those projected in
such forward-looking statements. Information is available on the Internet
World Wide Web at http://www.swgas.com.