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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. 46)
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
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This Amendment No. 46 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, July
22, 1999, July 30, 1999, August 3, 1999, August 4, 1999, August 5, 1999, August
6, 1999, August 9, 1999, August 11, 1999, August 12, 1999, August 13, 1999,
August 16, 1999, August 17, 1999, August 19, 1999, August 31, 1999, September 2,
1999, September 3, 1999, September 7, 1999, September 9, 1999, September 10,
1999, September 13, 1999, September 14, 1999, September 15, 1999, September 16,
1999, September 17, 1999, September 20, 1999, September 21, 1999, September 22,
1999, September 23, 1999, September 24, 1999, September 27, 1999, September 28,
1999, September 29, 1999, September 30, 1999, October 1, 1999, October 4, 1999,
October 5, 1999, October 6, 1999 and October 7, 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 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby supplemented and amended by adding the following:
Exhibit (a)(31) - Letter to Shareholders of the Company, dated October
12, 1999.
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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
/s/ Michael W. O'Donnell
By: ----------------------------------------
Name: Michael W. O'Donnell
Title: Senior Vice President and Chief
Financial Officer
Dated: October 12, 1999
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Exhibit List
Exhibit (a)(31) - Letter to Shareholders of the Company, dated October 12, 1999.
October 12, 1999
Dear Shareholder:
You may recently have received a letter from NiSource Inc. once again
urging you to participate in its ongoing unsolicited tender offer for all of the
outstanding shares of common stock of Columbia Energy Group.
YOUR BOARD OF DIRECTORS DETERMINED THAT NISOURCE'S $68 PER SHARE CASH
TENDER OFFER IS INADEQUATE AND NOT IN THE BEST INTERESTS OF COLUMBIA'S
SHAREHOLDERS. DUE TO THE HOSTILE NATURE OF THE OFFER, IT IS HIGHLY UNLIKELY THAT
SHAREHOLDERS WHO TENDER THEIR SHARES WOULD RECEIVE ANY PAYMENT FROM NISOURCE IN
LESS THAN 18 MONTHS -- IF EVER. ACCORDINGLY, WE REITERATE OUR RECOMMENDATION
THAT YOU NOT TENDER YOUR SHARES TO NISOURCE.
IT'S TIME FOR NISOURCE TO MOVE ON
We believe NiSource's ill-advised and stubborn decision to continue its
hostile takeover attempt is harmful to the shareholders of both companies. Since
June, NiSource has poured millions of dollars into fees for lawyers, investment
bankers, lobbyists, consultants and other advisers -- only to suffer a series of
legal and regulatory setbacks. Indeed, one of its three lawsuits against
Columbia was recently thrown out of court. NiSource's attempt to find support
for its hostile actions by co-sponsoring a folk festival and similar events in
Columbia's operating region appear to have backfired -- particularly in Ohio,
where a majority of state legislators have co-sponsored legislation that would
require close regulatory scrutiny of the NiSource proposal.
QUITE SIMPLY, NISOURCE HAS DONE NOTHING IN THE PAST TWO MONTHS TO
CHANGE OUR BELIEF THAT ITS VARIOUS MERGER PROPOSALS HAVE BEEN FOR THE WRONG
PRICE, AT THE WRONG TIME AND WITH THE WRONG COMPANY. Your Board's determination
that the NiSource tender offer is inadequate from a financial point of view is
based, in part, on a detailed financial analysis and opinions from our financial
advisors, Morgan Stanley Dean Witter and Salomon Smith Barney. In performing its
analysis, the Board and its advisors considered, among numerous other factors,
NiSource's ability to deliver on its unsolicited proposal. We have serious
doubts about NiSource's ability to satisfy the conditions of its financing
commitments and successfully complete the proposed transaction. WE BELIEVE
REGULATORS WILL HAVE SERIOUS CONCERNS ABOUT NISOURCE'S NEED TO BORROW MORE THAN
$5.7 BILLION TO COMPLETE THE ACQUISITION AND SUBSEQUENT NEED TO TRY TO REDUCE
THAT MASSIVE DEBT BY ATTEMPTING THE LARGEST EQUITY OFFERING EVER IN THE ENERGY
UTILITY INDUSTRY.
A QUESTIONABLE RECORD
As a separate matter, we do not see NiSource, with its high cost and
low margin operations, as a strategic fit with Columbia's assets and business
plan. We also have questioned NiSource's record on customer service, rate
increases, and environmental responsibility. A recent survey reported that
NiSource's principal subsidiary, Northern Indiana Public Service Company
(NIPSCO), was ranked "below average" for customer satisfaction among Midwest
electric utilities. Likewise, the latest annual survey by the Indiana Utility
Regulatory Commission found that NIPSCO has the highest residential electric
rates of all 42 electric utilities in the state.
In its public statements, NiSource often mentions its commitment to
"environmental stewardship." Yet NIPSCO last year was ranked as the third
"dirtiest" electric utility in the United States, based on nitrogen oxide
emissions rates, by the Natural Resources Defense Council. And in September, New
York State's Attorney General announced that he intends to file a lawsuit
against NiSource and several other utility companies for failing to reduce
harmful emissions of sulfur dioxide and nitrogen oxide from coal-fired
generating plants.
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A WASTE OF CORPORATE RESOURCES
For all of these reasons, we continue to believe strongly that NiSource
should end this needless waste of corporate resources at a time when there are
so many promising opportunities in the rapidly changing energy market.
DO NOT TENDER YOUR SHARES TO NISOURCE OR ITS SUBSIDIARY, CEG
ACQUISITION CORP. Please remember that CEG Acquisition Corp. has no relationship
with Columbia Energy Group. NiSource created CEG Acquisition Corp. solely to try
to achieve a hostile takeover of your company.
PREVIOUSLY TENDERED SHARES CAN BE WITHDRAWN AT ANY TIME BEFORE THEY ARE
ACCEPTED FOR PAYMENT. If you have any questions, including how to withdraw a
tender, please contact our information agent, MacKenzie Partners, at
1-800-322-2885 toll-free or 212-929-5500 (call collect).
Your Board of Directors and management will continue to act in the best
interests of the company and all its shareholders.
Sincerely,
OLIVER G. RICHARD III
Chairman, President and
Chief Executive Officer
If you have any questions please contact:
[MacKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
