I'd imagine it would go something similar to that, continue to divide the Right as the Alliance grows stronger and stronger while the Liberals maintain power. But hey, depending on the circumstances they might make a comeback and have and NDP like showing. The two would merge eventually however, there was no avoiding that.
At that point donors had threatened to cut off funding if talks weren't initiated. Plus the Alliance was unable to break through east of Manitoba. As CT said, merger was the only option.