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FORM 8-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
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Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event Reported) June 7, 1999
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COLUMBIA ENERGY GROUP
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(Exact name of registrant as specified in its charter)
Delaware 1-1098 13--1594808
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13880 Dulles Corner Lane, Herndon, VA 20171-4600
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(Address of principal executive offices)
Registrant's telephone number, including area code (703) 561-6000
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Item 5. Other Events
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Information contained in News Releases dated June 7, 1999 and June 10,
1999 is incorporated herein by reference.
On June 7, 1999, immediately after public disclosure of NiSource's
unsolicited bid for Columbia, three complaints (the "Complaints") were filed by
stockholders in the Chancery Court of Delaware alleging breaches of fiduciary
duty and seeking injunctive relief. Columbia believes that the allegations set
forth in the Complaints are completely without merit and Columbia intends to
contest these actions vigorously.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Columbia Energy Group
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(Registrant)
By /s/ J. W. GROSSMAN
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Vice President & Controller
Date: June 11, 1999
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For Immediate Release CONTACTS:
June 7, 1999 Columbia Energy Group
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Thomas L. Hughes (Financial Community)
703/561-6001
R. A. Rankin, Jr. (News Media)
703/561-6044
Kekst and Company
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Michael Freitag/Jessica Barist (News Media)
212/521-4800
COLUMBIA ENERGY GROUP RECEIVES UNSOLICITED
PROPOSAL FROM NISOURCE, INC.
HERNDON, Va., June 7 -- Columbia Energy Group today confirmed that it
has received an unsolicited proposal from NiSource, Inc. which contemplates a
merger transaction whereby NiSource would acquire all of Columbia's outstanding
common stock for $68 per share in cash.
Oliver G. Richard III, Columbia's chairman, president and CEO,
responded to a letter from Gary L. Neale, chairman, president and CEO of
NiSource, in the following letter sent today:
Dear Gary:
I am in receipt of your letter dated June 7, 1999. As we have
communicated to you previously, Columbia Energy Group is not for sale and is not
interested in any merger transaction in which another company acquires control
of Columbia. Our return to shareholders over the last three years supports our
belief that the best long-term interest of Columbia and its shareholders is for
Columbia to remain an independent company free to implement over time its
strategic business plan.
Nevertheless, in light of the formal nature of the offer set forth in
your letter, your offer will be considered by our Board of Directors. After the
consideration of your offer by our Board, we will advise you of the Board's
conclusions.
Sincerely,
Oliver G. Richard III
Columbia Energy Group, based in Herndon, Va., is one of the nation's
leading energy services companies, with 1998 revenues of nearly $6.6 billion and
assets of about $7 billion. Its operating companies engage in all phases of the
natural gas business, including exploration and production, transmission,
storage and distribution, as well as commodities marketing, energy management,
propane sales and electric power generation, sales and trading. Columbia
companies serve customers in 34 states and the District of Columbia; over 60
percent of America's gas and electric revenue is derived in and around its
principal operating region. Information about Columbia Energy Group (NYSE:CG) is
available on the Internet at www.columbiaenergygroup.com.
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For Immediate Release CONTACTS:
June 10, 1999 Columbia Energy Group
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Thomas L. Hughes (Financial Community)
703/561-6001
R. A. Rankin, Jr. (News Media)
703/561-6044
Kekst and Company
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Michael Freitag/Jessica Barist (News Media)
212/521-4800
COLUMBIA ENERGY GROUP BOARD REJECTS NISOURCE
PROPOSAL; REAFFIRMS COMPANY IS NOT FOR SALE
HERNDON, Va., June 10 -- Columbia Energy Group announced today that its
board of directors has unanimously rejected the unsolicited merger proposal from
NiSource, Inc. to acquire all of Columbia's outstanding common stock. The board
also reaffirmed that Columbia is not for sale.
Oliver G. Richard III, Columbia's chairman, president and chief
executive officer, informed Gary L. Neale, NiSource chairman, president and CEO,
of the Columbia board's decision today in the following letter:
Dear Gary:
Our Board of Directors met today to consider your most recent
unsolicited proposal. After careful deliberation, and in accordance with its
fiduciary duties, the Board unanimously rejected your proposal, having concluded
that it is not in the best interests of Columbia Energy Group and its
shareholders. The Board made this determination after receiving extensive and
thorough reports from our management and legal and financial advisors, including
an opinion from Salomon Smith Barney that the proposed consideration is
inadequate. Your proposal threatens to deprive Columbia shareholders of the
substantial value that Columbia's existing strategic plan will create.
The directors of Columbia Energy Group (all of whom are outside
directors except me) have substantial experience in business matters and are
committed to enhancing shareholder value by growing the business consistent with
our strategic plan. Since I joined Columbia in 1995, our total rate of return
has outperformed the S&P 500 and the S&P Natural Gas Index, and has been
approximately double that of your company. The Board of Directors believes
Columbia's stock does not fully reflect our true earnings potential. This only
strengthens our resolve to prevent another company from taking advantage of this
current anomaly and reaping for itself the significant values inherent in our
strategic plan.
Our strategic plan, which has guided Columbia's strong performance
since 1995, calls for continued growth in both the regulated and nonregulated
sectors of our business. Our specific strategies include: driving earnings
growth in our transmission and distribution segments through both new business
opportunities and continued cost reduction, redeploying cash in higher-return
nonregulated business segments, and building on Columbia's established position
to prosper in the emerging deregulated energy industry.
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We believe in the future of Columbia as an independent public company.
Our decision not to pursue your proposal is final. We will resist any efforts
that could deprive our shareholders of the long-term values inherent in
Columbia.
Sincerely,
Oliver G. Richard III
"Columbia's strong performance over the past four years, its current
strategic plan and its outstanding growth opportunities represent advantages
that our board has concluded should be received by Columbia's shareholders
rather than those of another company," said Richard. "In our opinion, a number
of NiSource's public statements, including their expectations as to the
regulatory timing and the potential benefits of their strategy for a combined
company, are simply not realistic."
Columbia's financial advisor is Salomon Smith Barney, and it has
recently added Morgan Stanley Dean Witter as co-financial advisor. Legal counsel
is Sullivan & Cromwell.
Columbia Energy Group, based in Herndon, Va., is one of the nation's
leading energy services companies, with 1998 revenues of nearly $6.6 billion and
assets of about $7 billion. Its operating companies engage in all phases of the
natural gas business, including exploration and production, transmission,
storage and distribution, as well as commodities marketing, energy management,
propane sales and electric power generation, sales and trading. Columbia
companies serve customers in 34 states and the District of Columbia; over 60
percent of America's gas and electric revenue is derived in and around its
principal operating region. Information about Columbia Energy Group (NYSE:CG) is
available on the Internet at www.columbiaenergygroup.com.
This press release contains "forward-looking statements" within the
meaning of the Federal securities laws, including statements concerning
Columbia's plans, objectives and expected performance. There can be no assurance
that actual results will not differ materially due to various factors, many of
which are beyond the control of Columbia, including, but not limited to,
competition, the regulatory approval process, weather, supply and demand for
natural gas, electricity, propane and petroleum and changes in general economic
conditions.
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