Southwest shareholders approve Oneok merger

Many speaking at Tuesday's stockholder meeting lambasted the deal, however, and Southwest Gas representatives declined to disclose how many of the company's 30 million outstanding shares were voted.

Roger Buehrer, a spokesman for the company, said Southwest Gas wanted to wait for an accurate count of the shares voted before disclosing the number.

Mario Gabelli, who heads a group of New York investment companies, is the largest institutional stockholder with 9.8 percent of the stock. He opposed the Oneok merger prior to the stockholder meeting.

Many of the about 225 stockholders attending the meeting at Southwest Gas criticized the company for accepting the lower of two bids, creating capital gains taxes for them and selling a company that serves booming areas of Southern Nevada and Arizona.

"You people make me sick, you people who are directors," commented one angry investor.

"This is not a merger," he said. "If it were a merger, we're going to be part of that new company."

"I don't think the shareholders were given a fair shake," said Edward Taylor, who said he has held his stock 16 years.

Taylor was one of several who complained that they didn't have the opportunity to make a tax-free swap of Southwest Gas stock for Oneok shares and would be hit with capital gains taxes.

"This isn't a merger," complained Neil Stewart, a Las Vegas stockholder. "This is a sell out."

One stockholder pointed out that Nevada Power stockholders with more than 100 shares could choose between cash and stock in Sierra Pacific Resources.

"We did not receive any, let alone a good stock-for-stock deal," responded Thomas Hartley, board chairman.

Oneok agreed to pay $30 in cash to stockholders, but Southern Union Co. of Austin, Texas, offered $33.50 in cash.

Southwest Gas executives contend that Southern Union wasn't likely to get regulatory approval for its merger plan.

The Nevada Public Utilities Commission has approved the Oneok deal. California regulators have a proposed settlement backed by the consumer advocate, and regulatory approval also is pending in Arizona.

Hartley said Southwest needed the financial support of a larger company such as Oneok to help finance the $200 million in costs of its rapidly growing service areas in Nevada, Arizona and California.

Southern Union is smaller than Southwest Gas, he said.

"What do we care, once you take our shares away from us?" said William Wolansky, one shareholder.

A stockholder from Chandler, Ariz., forecast that Southwest shares could only grow up because of rapid population growth in areas such as Phoenix.

"You forget how we stood with you when the stock went down. We stood with you when you sold the bank and all that," said Audrey Bilansky.

She was referring to Southwest Gas' purchase of PriMerit Bank, which had millions in problem loans and ultimately was sold to Norwest Corp.

"We all held on when the stock didn't pay anything for two or three years," said Cecil Gary, an investor from Sedona, Ariz.

"They have let down people that have supported the company," said Michelle Verges, a stockholder from Phoenix.

The company Tuesday also reported a second-quarter net loss of $3.6 million, up from $2.5 million, but pointed out that losses were common during the quarter because hot weather eliminates the need for space heating.

The loss per share was 12 cents, down from 9 cents a year ago. The operating margin rose 4 percent over a year ago to $3.6 million. Revenue rose 3.8 percent to $200.3 million from $192.9 million in the period last year.

Southwest Gas shares closed unchanged Tuesday at $28.75 before the merger vote.

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