Utility merger hearing set for Oct. 21

Wednesday, Sept. 1, 1999 | 11:30 a.m.

The Arizona Corporation Commission is tentatively scheduled to proceed with hearings on Southwest Gas Corp.'s merger with ONEOK Inc. on Oct. 21.

The hearings, which were supposed to have begun today, have been delayed by concerns by some commissioners that ONEOK used the regulatory process to avoid a proxy battle over Las Vegas-based Southwest with Southern Union Co.

"It's the current date, provided there's adequate information to move forward," Jerry Porter, spokesman for ACC Chairman Carl Kunasek, said. "If two commissioners feel there's inadequate information, it won't be the date."

The commission is probing a possible connection between ONEOK and former ACC executive secretary Jack Rose. ONEOK has been asked to answer seven questions about Rose's involvement in the deal by Sept. 15. Further, the parties must provide materials to the commission from ongoing litigation between ONEOK and Southern Union, such as affidavits.

The ACC's approval is required for the Southwest-ONEOK deal, already approved by shareholders, to proceed.

Separately, Moody's Investors Service placed Southwest's securities on review for possible upgrade. The move affects $726 million in debt. Moody's now has a "Baa3" rating on Southwest's preferred stock and "Baa2" on all other debt.

Moody's stated that it now believes Southern Union will not succeed in its bid, but believes if the Texas company were successful it "would finance such an acquisition prudently so as to minimize any negative impact on Southwest's ratings."