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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. 54)
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. 54 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, October 7, 1999, October 12, 1999, October 13,
1999, October 14, 1999, October 18, 1999, October 25, 1999, October 26, 1999,
October 10, 1999 and November 12, 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) is hereby supplemented and amended by adding the following:
As part of its ongoing previously announced process for evaluating
strategic alternatives, the Company has executed confidentiality agreements with
a number of third parties including NiSource. The execution of a confidentiality
agreement was a prerequisite to such parties obtaining certain non-public
information regarding the Company.
Item 8. Additional Information to be Furnished.
Item 8 is hereby supplemented and amended by adding the following:
At a meeting of the Board on November 17, 1999, the Board authorized
the Company to enter into a Key Management Agreement with one additional Key
Manager. The terms of such Key Management Agreement are described in detail in
Amendment 7 to the Company's Schedule 14D-9 (hereinafter, "14D-9/A No. 7"), and
such agreement is set forth in form as exhibit (c)(9) attached to 14D-9/A No. 7.
The summary description of the Key Management Agreements set forth in 14D-9/A
No. 7 and exhibit (c)(9) attached thereto are incorporated herein by reference.
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Item 9. Material to be Filed as Exhibits.
Item 9 is hereby supplemented and amended by adding the following:
Exhibit (a)(42) - Questions and Answers Sheet for Employees of the
Company.
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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
By: /s/ Michael W. O'Donnell
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Name: Michael W. O'Donnell
Title: Senior Vice President and
Chief Financial Officer
Dated: November 19, 1999
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Exhibit List
Exhibit (a)(42) - Questions and Answers Sheet for Employees of the
Company.
Exhibit (a)(42)
November 19, 1999
FOR COLUMBIA EMPLOYEES
The following is an update on Columbia's progress in its ongoing exploration and
review of strategic alternatives to enhance shareholder value. We hope it
answers questions you may have about the review process and recent reports in
the media. Here are the areas covered:
o Status of Review
o NiSource Interaction
o Confidentiality Agreement
o Unsolicited Tender Offer
o Next Steps
o STATUS OF REVIEW
WHAT IS THE CURRENT STATUS OF YOUR DISCUSSIONS WITH THIRD PARTIES REGARDING
A POSSIBLE TRANSACTION?
Columbia and its financial advisors have received numerous inquiries from
companies interested in discussions regarding a potential transaction. We
have sent and will continue to send confidentiality agreements to
interested parties. Several of these parties have now executed an
agreement, which will allow us to provide them with non-public information
as part of our process of exploring and reviewing opportunities to
significantly enhance shareholder value.
WHICH COMPANIES ARE YOU TALKING WITH?
Columbia's Board has authorized management to conduct its discussions with
interested parties in private. This will help prevent rumors and
misinformation from disrupting our business activities. Accordingly, we
will not comment on which companies we are talking to, except that we will
make the required disclosures regarding NiSource due to its unsolicited
tender offer.
IS IT TRUE THAT YOU ARE LOOKING OVERSEAS, AS WELL AS IN THE U.S.?
Our advisors are communicating with all companies that might be interested
in discussing a possible transaction. This includes companies in the U.S.
and abroad.
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WHAT KIND OF TRANSACTION DO YOU EXPECT TO PURSUE?
As we announced on Oct. 24, Columbia's board authorized management to
explore strategic alternatives to generate value in excess of that which
Columbia's business plan or the NiSource proposal could create. We will
consider a variety of possible transactions, including a merger,
reorganization or the disposition of a material amount of stock or assets.
As we have previously stated, there can be no assurance that any
discussions will result in a transaction or other action.
o NISOURCE INTERACTION
HAVE YOU HAD ANY DISCUSSIONS WITH NISOURCE?
As a matter of policy, we do not intend to provide the details of our
interaction with any third party. however, we must fulfill certain
disclosure requirements related to the existing tender offer by NiSource.
Accordingly, we have filed an amendment to our Schedule 14D-9 indicating
that NiSource has executed a confidentiality agreement with us. As with the
other companies that have executed confidentiality agreements, we expect
soon to enter into discussions.
DOES THE SIGNING OF A CONFIDENTIALITY AGREEMENT SIGNAL A CHANGE IN THE
RELATIONSHIP BETWEEN THE TWO COMPANIES?
Since announcing our review of strategic alternatives in late October, we
have said consistently that we would attempt to accommodate NiSource's
participation in this process along with other companies. The execution of
a confidentiality agreement simply demonstrates that we are living up to
that commitment.
o CONFIDENTIALITY AGREEMENT/STANDSTILL PROVISION
WHAT IS A CONFIDENTIALITY AGREEMENT?
A confidentiality agreement helps to set the ground rules by which two
parties can enter into discussions about a possible transaction, including
how the companies can use any non-public information they are provided.
WHAT IS THE SIGNIFICANCE OF THE "STANDSTILL" PROVISION IN THE
CONFIDENTIALITY AGREEMENT WITH NISOURCE?
A standstill provision -- which is designed to prevent a company from
taking hostile actions against another company from which it has received
non-public information -- is typical for companies that are exploring
strategic alternatives. This provision is in all of the confidentiality
agreements we have executed, but has been modified in the
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NiSource agreement to reflect the fact that NiSource had already launched
an unsolicited tender offer.
WHAT IS THE SIGNIFICANCE OF THE MARCH 1, 2000 DEADLINE IN THE STANDSTILL
AGREEMENT?
This deadline is there to permit NiSource to participate in the strategic
review process along with other companies, but allows NiSource enough time
to pursue other alternatives before our annual meeting should it wish to do
so. We said we would attempt to reasonably accommodate NiSource in this
process, and this modified standstill provision is proof that we are
honoring that commitment.
WHAT IS THE STATUS OF NISOURCE'S LAWSUITS AGAINST COLUMBIA?
All of the litigation-related activity has been suspended.
o UNSOLICITED TENDER OFFER
WHY DID NISOURCE EXTEND ITS UNSOLICITED TENDER OFFER UNTIL DEC. 10?
We continue to believe that NiSource's unsolicited tender offer is little
more than a public relations ploy designed to pressure Columbia's board and
management. The board has previously determined that NiSource's proposal to
acquire all of the outstanding common stock of Columbia for $74 per share
in cash is inadequate and not in the best interest of Columbia or its
shareholders.
WHAT WILL HAPPEN IF NISOURCE EVER RECEIVES TENDERS FOR MORE THAN 85 PERCENT
OF THE OUTSTANDING SHARES?
At the moment, that seems unlikely. at the time it extended its $74 offer
to Dec. 10, NiSource had received tenders representing 38 percent of
Columbia's outstanding common shares. However, no matter how many tenders
NiSource receives, it still must go through a lengthy regulatory approval
process before it can buy the tendered shares. That process could take as
long as 12 to 18 months to be completed, if ever. We believe NiSource wants
to keep its options open to pursue various alternatives.
o NEXT STEPS
WHAT HAPPENS NOW?
Over the next several weeks, we expect to begin discussions with those
parties that have executed confidentiality agreements. Our objective, as we
have previously
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stated, is to explore and review opportunities to significantly enhance
shareholder value.
WHAT TIMETABLE IS COLUMBIA FOLLOWING FOR ITS REVIEW PROCESS?
We are not following a set timetable. Rather, our objective is to move
forward diligently, but carefully.
WHEN CAN WE EXPECT TO HEAR THE RESULTS OF THE REVIEW PROCESS?
As we have stated, it is in the best interests of Columbia and its
shareholders to conduct the evaluation process in private. Therefore, we
do not intend to make any further announcements -- except as required
regarding NiSource -- unless and until any discussions lead to material
developments that should be disclosed.
We are employees of Columbia too, and we are particularly sensitive to
your need to be kept informed about developments in a timely manner. We
will continue to communicate the latest news as quickly as possible. The
review process could take a long time, and we ask you to join with us in
staying focused on the company's day-to-day business, and continuing to
provide value to Columbia's shareholders, customers and communities.
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