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Southwest Gas gets new bid
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February 22, 1999: 10:00 a.m. ET
Southern Union offers $970M, topping agreed-on bid from Oneok
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NEW YORK (CNNfn) - The bidding in the natural gas industry was explosive Monday.
After two multibillion-dollar deals were announced, Southwest Gas Corp. said it got a $970 million takeover bid from Southern Union Co. after agreeing to be bought by Oneok Inc. in a deal valuing its stock at about $864 million.
Southwest Gas (SWX), based in Las Vegas, serves about 1 million customers in Arizona, Nevada and California. Southern Union (SUG), based in Austin, Texas, has nearly 1 million gas customers in Texas and Missouri and also markets propane gas.
The announcement came after Dominion Resources Inc. (D) said it would buy Pittsburgh's Consolidated Natural Gas Co. (CNG) for $6.3 billion in stock, creating what it said would be the nation's No. 4 electric and gas utility.
And Sempra Energy (SRE), formed last year by the merger of two big California utilities, announced plans to buy natural gas company KN Energy (KNP) for $1.8 billion in cash and stock.
The bidding comes as the oil and gas industry has been hit hard by falling prices and producers look to push into new sales territories while they consolidate to cut costs.
Southwest Gas said its board agreed to begin talks with Southern Union regarding its cash proposal, adding there is no assurance a deal will be reached and that its merger pact with Oneok remains in effect in the meantime.
Southwest announced its merger with Oneok, a Tulsa, Okla., gas and energy company, on Dec. 15, saying the deal would be worth about $1.8 billion including assumed debt. It said its board hasn't changed its position so far, based on the information available from Southern Union.
Oneok (OKE) said it was "surprised" by the new but would press ahead with its agreement.
"Obviously we were surprised by the Southern Union offer," Oneok Chairman Larry Brummett said. "We believe our offer is fair, competitive and still valid." 
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