Dennis Steinberg left the Pinnacle West Corporation annual meeting a happy man.

He knew his campaign was working--the ads, the guest appearances and private meetings, all executed with the precision of a chess game in the weeks leading up to this day. He could see the impact in the faces of the stockholders who took turns at the microphone inside the downtown Hyatt Regency's packed ballroom.

The dapper, 43-year-old utility executive and two colleagues watched quietly from the sidelines as the stockholders' explosive anger poured onto the stonefaced PinWest directors. He was relishing every embarrassing moment, admitting with an impish grin, "It was very encouraging."

But then, Steinberg could afford to smile. He doesn't work for PinWest or its chief subsidiary, Arizona Public Service Company. He wasn't one of the PinWest officials all but publicly pantsed by furious investors that hot May morning. He wasn't up there trying to explain why a company with a built-in profit margin lost $551 million last year."

Steinberg works for PacifiCorp, the giant Portland, Oregon-based company that is trying to pull off the biggest corporate takeover in Arizona history. He's one of the strategists behind the PacifiCorp campaign, which started last October with a straightforward bid to buy APS, went through two friendly merger offers, and now is a no-holds-barred battle for control of Arizona's biggest company.

In the context of the Nineties, these battles have a bad public relations image. As corporate raiders like T. Boone Pickens and Frank Lorenzo began taking over America's strongest companies only to strip them for parts, people had good reason to view this sort of gamesmanship with extreme skepticism. Steinberg's job, then, is to convince people they aren't looking at a corporate raider, they're looking at a white knight. The campaign to win hearts and minds is taking place not only in Phoenix, but on Wall Street and in half a dozen Western state capitals where PacifiCorp also does business.

Ordinarily, it would be a tough sell, even for someone with sterling financial backing and astute political advisers. But Dennis Steinberg has a secret weapon.

THE ADS HIT Phoenix airwaves with the force of a punch in the gut. For weeks surrounding PacifiCorp's most recent $1.87 billion offer to buy PinWest, they've saturated drive-time radio in the Valley.

They are brief, catchy spots: One opens with the sound of a fictional electric meter tick, tick, ticking away. "Everyone knows that's the sound of their APS meter," a voice says, and goes on to describe how PacifiCorp will keep electric bills down by tapping its extensive power reserves in the Pacific Northwest to supply Arizona in the summer, and do the reverse when winter chills the northland.

Another radio ad begins with a straightforward announcement that PacifiCorp customers enjoy some of the lowest electric rates in the country. Then, in midsentence, a voice interrupts with a "news flash" detailing PinWest's abysmal financial condition, and the likely damage to customer pocketbooks.

Geared for maximum impact on APS' beleaguered customers, these "infomercials" have been loaded into the programming of stations whose demographic surveys suggest listeners who read, vote, and pay attention to issues. They've been running just when APS customers are facing the worst time of the year, when record-breaking 120-degree days mean utility bills that can outstrip the monthly mortgage payment.

"Ratepayers can't vote on the merger, unless they are shareholders as well, but they do elect the corporation commission, which must approve the merger in this state," reasons Ed Grosswiler, PacifiCorp head of government relations. The campaign has primarily concentrated on radio and print because ads can be changed on a daily basis, if need be, to reflect new developments in the unfolding merger battle.

PacifiCorp's decision to appeal directly to the Arizona public reflects the company's frustration: PinWest has rejected four PacifiCorp offers, ranging from the first "lowball" offer of $8 per share to the most recent, which nearly tripled the original offer. It's a far cry from the warm reception PacifiCorp got from Utah Power & Light Company, with which it merged in 1988. In that merger, the main hurdle was to convince state regulators, a task PacifiCorp accomplished through its testimony in exhaustive hearings before utility commissions in what is now a seven-state service territory.

The campaign to merge with APS, however, turns more hostile by the day. PacifiCorp opened its campaign last November with a straight-out offer to buy APS from PinWest, a hint that it wants nothing to do with the management that took a company with $15 billion in assets and ran it into deep red ink. And while PacifiCorp retained, and even promoted, top managers at Utah Power & Light, such a commitment is conspicuously absent in its subsequent merger offers to PinWest.

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Kathleen Stanton