Deceptive e-mails alleged in Southwest Gas battle

Tuesday, Oct. 10, 2000 | 11:01 a.m.

The Texas company that unsuccessfully tried to take over Southwest Gas Corp. is accusing associates of the Las Vegas company of improperly trying to influence shareholders through anonymous messages posted on the Internet.

The latest allegations by Southern Union Co. of Austin center around four anonymous postings made to a Southwest Gas message board operated by the Yahoo! Internet portal in August 1999. In a press release issued today, Southern Union distributed an article written by Arizona news agency Capitol Media Services, saying the article "confirms many of Southern Union's allegations."

These postings, Capitol Media reported, were made by Los Angeles public relations firm Sitrick & Co., hired by Southwest Gas in connection with Southwest's proposed $1.8 billion merger with ONEOK Inc. of Tulsa, Okla.

The posts were made by "tristan666]1999" and "my]name]is]ozymandius" on Aug. 3 and 4, 1999 -- just days before Southwest shareholders voted on the ONEOK proposal. At the time, Southwest was also trying to convince shareholders that a $1.88 billion counteroffer by Southern Union was not in shareholders' best interest.

"Anyone who votes against the Oneok acquisition of (Southwest Gas) is nuts," one e-mail read. "The problem with the Southern Union offer is that it will never get approved. (Southern Union) has had a pile of trouble with the utility regulators in Missouri. Which would you rather have? $30 for sure now or maybe $33.50 in two or three years?"

Another post said Southern Union "(has) a record of suing everybody in sight ... but they almost never win anything."

Southern Union had sued Southwest Gas and ONEOK several weeks before the postings, accusing both companies of manipulating the regulatory process in an effort to squelch Southern Union's bid for Southwest Gas.

The text of this posting, Capitol Media reported, was identical to that found in a Sitrick memo. The memo went on to say that "we need to get the following posted 'anonymously' on the Yahoo website."

The only identification given with the post was for "ozymandius," identified as a 56-year-old man from Pasadena, Calif.

Companies are prohibited by the Securities and Exchange Commission from attempting to influence shareholders anonymously.

Sitrick officials could not be reached this morning for comment on the allegations. In the Capitol Media article, however, a Sitrick attorney said suggestions that the firm acted improperly were "ludicrous," and called the allegations "a thinly veiled effort to influence the outcome of this litigation through the press."