================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 8)
COLUMBIA ENERGY GROUP
(NAME OF SUBJECT COMPANY)
COLUMBIA ENERGY GROUP
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01
(TITLE OF CLASS OF SECURITIES)
197648108
(CUSIP NUMBER OF CLASS OF SECURITIES)
MICHAEL W. O'DONNELL
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
COLUMBIA ENERGY GROUP
13880 DULLES CORNER LANE
HERNDON, VIRGINIA 20171
(703) 561-6000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPY TO:
NEIL T. ANDERSON, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212) 558-4000
================================================================================
<PAGE>
This Amendment No. 8 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9 filed with the Securities and
Exchange Commission on July 6, 1999, and as subsequently amended July 6, 1999,
July 9, 1999, July 12, 1999, July 15, 1999, July 16, 1999, July 20, 1999 and
July 22, 1999 (as so amended, the "Schedule 14D- 9"), by Columbia Energy Group,
a Delaware corporation (the "Company"), relating to the tender offer by NiSource
Inc., an Indiana corporation, to purchase for cash through its wholly-owned
subsidiary, CEG Acquisition Corp., a Delaware corporation, all of the
outstanding common shares, par value $0.01 per share, of the Company (the
"Offer"). Capitalized terms used but not defined herein have the meaning
ascribed to them in the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b)(2) is hereby supplemented and amended by adding the
following:
The Company has learned that the five Columbia local distribution
companies have transacted an aggregate of approximately $144,075 in business
under the base contracts with NESI since their execution on March 1, 1996.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
Item 6(a) is hereby supplemented and amended by adding the following:
In connection with the exercise of a Stock Appreciation Right (the
"SAR") granted under the Company's 1985 Long Term Incentive Plan, Senior Vice
President and Chief Financial Officer Michael W. O'Donnell was issued 1,265
shares of Common Stock on June 28, 1999. The SAR was set to expire on October
17, 1999 and, pursuant to the terms of the 1985 Long Term Incentive Plan, the
ability of the holder to exercise the SAR could not have been extended past the
October 17, 1999 expiration date.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Salomon Smith Barney has removed the word "solely" from the penultimate
paragraph of its opinion regarding the inadequacy of the NiSource Offer.
The opinion of Salomon Smith Barney, as so revised, is attached hereto
as Exhibit (a)(14).
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby supplemented and amended by adding the following:
Exhibit (a)(14) - Revised Opinion of Salomon Smith Barney, dated
July 1, 1999.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
COLUMBIA ENERGY GROUP
By: /s/ Michael W. O'Donnell
--------------------------------------
Name: Michael W. O'Donnell
Title: Senior Vice President and Chief
Financial Officer
Dated: July 30, 1999
<PAGE>
Exhibit List
Exhibit (a)(14) - Revised Opinion of Salomon Smith Barney, dated July 1, 1999.
SALOMONSMITHBARNEY
- ------------------
A member of citigroup
July 1, 1999
Board of Directors
Columbia Energy Group
13880 Dulles Corner Lane
Herndon, VA
Ladies and Gentlemen:
You have requested our opinion as to the adequacy, from a financial point of
view, to the holders of common stock, par value $0.01 per share ("Company Common
Stock"), of Columbia Energy Group (the "Company") of the tender offer of CEG
Acquisition Corp. ("Subsidiary"), a wholly owned subsidiary of NiSource Inc.
("NI"), to purchase all of the issued and outstanding shares of Company Common
Stock, other than shares of Company Common Stock owned by NI and its affiliates,
for $68 per share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
June 25, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal
(which together with the Offer to Purchase constitutes the "Offer"). The terms
of the Offer are more fully set forth in the Schedule 14D-1 (the "Schedule
14D-l") filed by Subsidiary and NI with the Securities and Exchange Commission
on June 25, 1999.
In connection with rendering our opinion, we have reviewed and analyzed, among
other things, the following; (i) certain publicly available information
concerning the Company: (ii) certain internal information, primarily financial
in nature, including projections, concerning the business and operations of the
Company, furnished to us by the Company for purposes of our analysis; (iii)
certain publicly available information concerning the trading of, and the
trading market for, Company Common Stock; (iv) certain publicly available
information concerning NI; (v) certain publicly available information with
respect to certain other companies that we believe to be comparable to the
Company and the trading markets for certain of such other companies' securities;
(vi) the Offer to Purchase and the Schedule 14D-1; (vii) a report from the Ryder
Scott Company dated January 27, 1999, regarding the reserves, future production
and income and certain leasehold and royalty interests of Columbia Natural
Resources Corporation (the "Ryder Scott Report"); and (viii) certain publicly
available information concerning the nature and terms of certain other
transactions that we consider relevant to our inquiry. We further have
considered such other information, financial studies, analyses, investigations
and financial, economic and market criteria that we deemed relevant. We also
have met with certain officers and employees of the Company to discuss the
foregoing as well as other matters that we believe relevant to our inquiry.
<PAGE>
SALOMONSMITHBARNEY
- ------------------
A member of citigroup
Columbia Energy Group
July 1, 1999
Page 2
In our review and analysis and in arriving at our opinion, we have assumed and
relied upon the accuracy and completeness of all of the financial and other
information provided to us or publicly available and have neither attempted
independently to verify nor assumed any responsibility for verifying any of such
information and have further relied upon the assurances of management of the
Company that they are not aware of any facts that would make any of such
information inaccurate or misleading. We have not conducted a physical
inspection of any of the properties or facilities of the Company, nor have we
made or obtained or assumed any responsibility for making or obtaining any
independent evaluations or appraisals of any of such properties or facilities,
nor have we been furnished with any such valuations or appraisals; however, we
have reviewed the Ryder Scott Report and have relied without independent
verification upon such report for purposes of this opinion. With respect to
financial projections, we have been advised by the management of the Company and
have assumed that they were reasonably prepared and reflect the best currently
available estimates and judgment of the management of the Company as to the
future financial performance of the Company and we express no view with respect
to such projections or the assumptions on which they were based.
In conducting our analysis and arriving at our opinion as expressed herein, we
have considered such financial and other factors as we have deemed appropriate
under the circumstances including, among others, the following: (i) the
historical and current financial position and results of operations of the
Company; (ii) the business prospects of the Company; (iii) the historical and
current market for Company Common Stock and for the equity securities of certain
other companies that we believe to be comparable to the Company; and (iv) the
nature and terms of certain other merger transactions that we believe to be
relevant. We have also taken into account our assessment of general economic,
market and financial conditions as well as our experience in connection with
similar transactions and securities valuation generally. Our opinion necessarily
is based upon conditions as they exist and can be evaluated on the date hereof,
and we assume no responsibility to update or revise our opinion based upon
circumstances or events occurring after the date hereof. Our opinion is, in any
event, limited to the adequacy, from a financial point of view, of the Offer to
the holders of Company Common Stock. Our opinion is not intended to be and shall
not constitute a recommendation to any holder of Company Common Stock as to
whether to tender shares of Company Common Stock pursuant to the Offer.
We have acted as financial advisor to the Company in connection with the Offer
and will receive a fee for such services. In addition, in the ordinary course
business, we and our affiliates may actively trade the securities of the Company
and NI for our own account and for the accounts of customers and, accordingly,
may at any time hold a long or short
<PAGE>
SALOMONSMITHBARNEY
- ------------------
A member of citigroup
Columbia Energy Group
July 1, 1999
Page 3
position in such securities. We and our affiliates (including Citigroup Inc.)
may have other business relationships with the Company or NI.
This opinion is intended for the benefit and use of the Company (including the
management and directors of the Company) in considering the transaction to which
it relates and may not be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for any
purpose, without the prior written consent of Salomon Smith Barney.
Based upon and subject to the foregoing, it is our opinion that, as of the date
hereof, the Offer is inadequate, from a financial point of view, to the holders
of Company Common Stock, other than NI and its affiliates.
Very truly yours,
SALOMON SMITH BARNEY
