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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. 9)
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. 9 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 and July 30, 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)(15) - Text of Question and Answer sheet for use in
answering questions of Columbia employees and
retirees
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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: August 3, 1999
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Exhibit List
Exhibit (a)(15) - Text of Question and Answer sheet for use in answering
questions of Columbia employees and retirees.
FOR COLUMBIA EMPLOYEES AND RETIREES
We thought it might be helpful to provide answers to some questions frequently
asked by Columbia Energy Group employees and retirees about the ongoing hostile
takeover attempt by NiSource Inc.
PLEASE EXPLAIN THE "TENDER OFFER" THAT NISOURCE IS CONDUCTING.
By conducting a "tender offer" for Columbia's outstanding common stock, NiSource
wants you and your fellow shareholders to give it the right to buy all of your
shares for $68 per share. However, even if you do give it this right by
"tendering" your shares before the August 6 deadline, this does not mean that
NiSource is actually going to buy any Columbia stock in the near future, if
ever.
Under the laws governing our industry, even if NiSource received tenders for a
majority of our common stock, it would not be able to purchase more than 4.9
percent of that stock unless -- and until -- it receives permission from the
Securities and Exchange Commission. This approval would not be granted until
each of the states in which Columbia owns distribution facilities approves the
acquisition -- a process that could take 18 months, or even longer. Accordingly,
even if NiSource were to get all of these regulatory approvals, it could be 18
months or more before shareholders would receive payment for any stock they
tendered.
WHY IS THE COLUMBIA BOARD OF DIRECTORS RECOMMENDING THAT SHAREHOLDERS NOT TENDER
THEIR SHARES TO NISOURCE?
Quite simply, the Board does not believe NiSource's tender offer is in the best
interest of Columbia or its shareholders. Among other reasons, the Board
believes that NiSource's proposal is financially inadequate and that Columbia
has an outstanding team and strategic plan that will build tremendous value for
our shareholders. Because of our unique assets and long-term prospects, the
Board -- and your management -- believe the company is worth much more than the
$68 per share that NiSource is offering.
IF I DECIDE NOT TO TENDER MY SHARES, DO I HAVE TO DO ANYTHING? HOW CAN I HELP TO
SUPPORT COLUMBIA?
If you do not wish to tender your shares, there is no need for you to take any
action. Not tendering your shares demonstrates your opposition to NiSource's
hostile takeover attempt.
WHEN WILL WE KNOW HOW MANY SHARES HAVE BEEN TENDERED?
Under the rules governing the tender offer procedure, NiSource is required to
disclose the results of its tender offer by the morning of Monday, August 9.
<PAGE>
WHAT WILL HAPPEN ON OR SOON AFTER AUGUST 6TH?
At some point before or on the morning of August 9, NiSource will announce the
results of the tender offer as of the August 6 deadline. It also will announce
whether or not it intends to extend the deadline of the offer to some future
date.
No matter how many shares are tendered, it is likely that NiSource will describe
the outcome as an important "victory" and claim the results indicate a strong
show of support for its hostile takeover attempt. However, the significance of
the tender offer is questionable. NiSource itself has said the tender offer is
non-binding and poses no cost or risk for shareholders. And many shareholders
who told us they would tender their shares also said they do not believe $68 per
share is adequate compensation for their investment in Columbia.
WHAT IF A MAJORITY OF SHARES ARE TENDERED TO NISOURCE?
It is important to note that even if a majority of Columbia shares were tendered
to NiSource, this does not mean that NiSource would have control of Columbia.
NiSource has not obtained, or even filed for, the key regulatory approvals
necessary to actually be able to purchase the shares. Accordingly, we believe
NiSource would not be able to buy any of the tendered shares for at least 12 to
18 months--if ever.
Likewise, we don't believe the tender of a majority of the shares would be
particularly surprising or significant. We already know our shareholders would
like to see Columbia's true value and long-term business potential more fully
reflected in its stock price. The Board and Columbia's management are fully
committed to enhancing shareholder value in both the near and the long term.
HOW WILL NISOURCE'S HOSTILE TAKEOVER ATTEMPT AFFECT MY JOB?
There is no need for concern. We believe it is virtually impossible for NiSource
- -- or any company, for that matter -- to complete a hostile takeover of our
company in less than 12 to 18 months, if ever. In fact, no hostile takeover
attempt has ever been successful in our industry due to the considerable
regulatory approvals that are required.
WHY IS NISOURCE PLACING NEWSPAPER ADVERTISEMENTS AND SPONSORING FESTIVALS IN
STATES WHERE IT DOES NOT HAVE ANY BUSINESS?
We believe this publicity campaign is yet another part of NiSource's effort to
try to drum up support for its hostile takeover attempt. However, we expect that
government officials, regulators and consumers in the targeted states will not
react warmly to this intrusion by NiSource, particularly when they learn more
about NiSource's record on customer service and consumer choice. For example, a
recent survey by J.D. Power & Associates and Navigant Consulting found that
NiSource's major subsidiary in Indiana was ranked "below average" for customer
satisfaction among Midwest electric utilities. Likewise, NiSource has yet to
demonstrate that it truly supports Energy Economic Democracy for its ratepayers.
WHAT CAN YOU TELL ME ABOUT THE "GOLDEN PARACHUTES" I'VE BEEN HEARING ABOUT?
Columbia's Board of Directors granted special incentives to a number of senior
members of management after NiSource launched its hostile takeover. These
incentives only take effect if there is a "change of control" at the company and
in most cases only upon termination of the affected employee.
The Board granted these incentives for two important reasons: First, to ensure
management remained focused on Columbia's most important objective -- delivering
value to shareholders and customers; and second, to ensure that outside
executive recruiters (who often target companies in situations like this) could
not easily try to tempt key members of our team away. The fact that Columbia did
not feel the need to implement such arrangements until now is a testament to the
loyalty and commitment of our staff.
Incentive programs such as these are very common. In fact, NiSource has a
similar program for its own executives, as do many other companies.
PLEASE EXPLAIN THE "FREEZE" ON EMPLOYEES' COLUMBIA STOCK FUND THRIFT PLANS.
In order for Fidelity Management Trust Company, the trustee of our thrift plans,
to accurately tabulate the number of shares tendered that are in the thrift
plans, Fidelity needed to freeze activity in the Columbia Stock Fund accounts
for approximately one week prior to the expiration of the tender offer on August
6. This "freeze" may occur again approximately one week prior to the expiration
of each extension (if any) of the offer by NiSource.
COULD NISOURCE'S HOSTILE TAKEOVER ATTEMPT HAVE ANY IMPACT ON COLUMBIA'S PENSION
PLAN? WHAT WOULD HAPPEN TO THE PLAN IF NISOURCE SUCCEEDED?
The pension fund is protected under Federal law. Even in the highly unlikely
event that NiSource were successful in its hostile takeover attempt, retirees'
pensions would not be affected. As for current employees, it is possible that
NiSource could try to make changes to the pension plan if it succeeded in
acquiring the company, but any such changes would not affect pension benefits
already earned at the time the plan was modified.
WHEN CAN WE EXPECT TO HEAR MORE FROM RICK RICHARD AND/OR THE BOARD?
We will continue to keep you informed about all important developments as
quickly and completely as possible. However, we also must ask for your
understanding. Because of NiSource's hostile offer and the regulatory
restrictions it has created, communication is more complicated than under normal
circumstances.
