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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. 1)
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. 1 amends and supplements the Solicitation/
Recommendation Statement on Schedule 14D-9 filed with the Securities and
Exchange Commission on July 6, 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. 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)(5) -- Form of letter to Columbia Energy Group employees,
dated July 6, 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
By: /s/ Patricia A. Hammick
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Name: Patricia A. Hammick
Title: Senior Vice President, Strategy and
Communications, Columbia Energy
Group Service Corporation
Dated: July 6, 1999
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Exhibit List
Exhibit (a)(5) -- Form of letter to Columbia Energy Group employees,
dated July 6, 1999
Exhibit (a)(5)
DRAFT -- 7/6/99 10 A.M. PRIVILEGED AND CONFIDENTIAL
July 6, 1999
Dear Columbia Colleagues,
As you know, NiSource Inc. began an unsolicited tender offer on June 25 for all
outstanding shares of common stock of Columbia Energy Group for $68 per share in
cash. Today we announced that Columbia's board of directors has determined that
the NiSource tender offer is inadequate and not in the best interests of
Columbia or its shareholders. Our press release is attached.
The board made its determination after careful deliberation. Columbia's
directors reviewed reports from management and outside legal and financial
advisors, including "inadequacy opinions" from each of our co-financial
advisors, Morgan Stanley Dean Witter and Salomon Smith Barney Inc.
BASED ON THE BOARD'S DETERMINATION, WE ARE ADVISING ALL OF OUR SHAREHOLDERS -- A
GROUP THAT INCLUDES MANY OF YOU -- TO REJECT NISOURCE'S HOSTILE TAKEOVER ATTEMPT
AND NOT TENDER ANY SHARES TO NISOURCE.
WHAT IS A "TENDER OFFER?" A "tender offer" for your shares means that someone
wants the right to buy your stock at a certain price by a particular
deadline--as long as certain conditions are met. NiSource has offered to buy
Columbia stock tendered by August 6, 1999. However, that does not mean NiSource
is going to buy Columbia stock on that date. In fact, it will be impossible, due
to extensive regulatory approval requirements and other conditions, for NiSource
to do so. Moreover, NiSource itself has publicly described its tender offer as
little more than a "no-cost, no-risk, fully reversible" public relations device.
COMMUNICATING WITH OUR SHAREHOLDERS. In the weeks before NiSource announced its
tender offer, we met with many of our largest shareholders and the securities
analysts covering our industry. There is growing sentiment among these
investment professionals that the NiSource offer is inadequate and does not
reflect Columbia's true value. Moreover, following our annual two-day analyst
conference in late June, we believe our shareholders have a better understanding
of our strategic plan, particularly our non-regulated growth strategy, and the
tremendous value that we are prepared to deliver.
WE ARE BUILDING VALUE. Together we have worked hard over the past four years to
build a Columbia that promotes change and competition, and is well positioned to
build value for its shareholders, customers and employees in an energy industry
that is being transformed by deregulation. Our company has posted strong
performance over that time. We have expanded and enhanced Columbia's unique and
valuable network of assets and businesses. We have built a talented and
effective management team. And we have developed--and are making strong progress
on--our strategic objectives for 2001 as well as a sound platform for success in
the years beyond.
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WHAT WE TOLD NISOURCE. We have told NiSource's chairman several times that
Columbia is not for sale and that his various merger proposals have been for the
wrong price, at the wrong time, with the wrong company. We believe he is
persisting because he needs to find a solution for NiSource's vulnerabilities in
an increasingly competitive industry -- and Columbia's superior assets, great
employee base and strong strategic plan are very attractive to him.
CONSIDER THE FACTS, NOT SPECULATION. The NiSource offer has received extensive
publicity. Their company has made a lot of self-serving allegations. This kind
of situation breeds rumors and speculation, and it is natural that you may have
questions and concerns.
Please be assured that we will take all appropriate actions to protect Columbia
from this hostile takeover attempt. It is also important to understand that we
are not in any imminent danger of being taken over by NiSource or any other
company. Under the laws governing our industry, even if NiSource received
tenders for a majority of our common stock, they would not be able to purchase
more than 4.9 percent of that stock unless--and until--they receive a variety of
approvals from federal and state regulators. The regulatory approval process
could take 18 months, or even longer. Moreover, even if NiSource were to
nominate candidates to stand for election as directors at next year's annual
meeting, under Columbia's certificate of incorporation, NiSource would be unable
to gain a majority of our board of directors prior to 2001.
We will continue to communicate with you as rapidly, directly--and candidly--as
possible.
WE HAVE A COMMON OBJECTIVE. We know our shareholders would like to see
Columbia's true value and long-term potential more fully reflected in its stock
price, which has been impacted in 1999 by much warmer than usual weather, and
significant investment and costs in the marketing segment. The board, senior
management and I share that objective-- I'm sure you do too.
You can help us achieve this objective by continuing to do what you do so
well--provide outstanding service and deliver outstanding value to our
customers, shareholders and the communities we serve.
Thank you for your continued spirit and support.
Sincerely,
Oliver G. Richard III
Chairman, President and CEO
