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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-1/A
(Amendment No. 6)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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COLUMBIA ENERGY GROUP
(Name of Subject Company)
CEG ACQUISITION CORP.
NISOURCE INC.
(Bidders)
COMMON STOCK, $.01 PER SHARE
(Title of Class of Securities)
197648108
(CUSIP Number of Class of Securities)
Stephen P. Adik
Senior Executive Vice President,
Chief Financial Officer And Treasurer
NiSource Inc.
801 East 86th Avenue
Merrillville, Indiana 46410-6272
(219) 853-5200
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Bidder)
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COPIES TO:
Peter V. Fazio, Jr., Esq. Alan G. Schwartz, Esq.
Schiff Hardin & Waite Simpson Thacher & Bartlett
6600 Sears Tower 425 Lexington Avenue
Chicago, Illinois 60606 New York, New York 10017
Telephone: (312) 258-5500 Telephone: (212) 455-2000
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This Amendment No. 6 (this "Amendment") amends and supplements
the Tender Offer Statement on Schedule 14D-1, as amended, originally
filed with the Securities and Exchange Commission on June 25, 1999
(the "Schedule 14D-1") by CEG Acquisition Corp., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of NiSource
Inc., an Indiana corporation ("Parent"). The Schedule 14D-1 and this
Amendment relate to a tender offer by the Offeror to purchase all of
the outstanding shares of common stock, par value $.01 per share (the
"Shares"), of Columbia Energy Group, a Delaware corporation (the
"Company"), at a purchase price of $68 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 25, 1999
(the "Offer to Purchase"), and in the related Letter of Transmittal
(which, as either may be amended or supplemented from time to time,
collectively constitute the "Offer"), copies of which are filed with
the Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively.
2
Item 10. Additional Information.
On July 14, 1999, Parent issued i) the "NiSource/Columbia
StraightTalk" communication to stockholders of the Company, and ii) a
press release relating to the engagement of Wasserstein Perella & Co.,
Inc. to provide advisory services to Parent, which are included herein as
Exhibits (a)(15) and (a)(16), respectively, and incorporated herein by
reference.
Item 11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase, dated June 25, 1999.*
(a)(2) Letter of Transmittal.*
(a)(3) Letter dated June 25, 1999, from Dealer Manager to
brokers, dealers, commercial banks, trust
companies and other nominees.*
(a)(4) Letter dated June 25, 1999, to be sent by brokers,
dealers, commercial banks, trust companies and
other nominees to their clients.*
(a)(5) Notice of Guaranteed Delivery.*
(a)(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) Form of Summary Advertisement, dated June 25,
1999.*
(a)(8) Press Release issued by Parent on June 24, 1999.*
(a)(9) Form of letter dated June 28, 1999 from Gary L.
Neale, Chairman, President and Chief Executive
Officer of Parent, to investors of the Company.*
3
(a)(10) Press Release issued by Parent on June 28, 1999.*
(a)(11) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on
July 2, 1999.*
(a)(12) Form of letter dated July 2, 1999, from Gary L.
Neale, Chairman, President and Chief Executive
Officer of Parent, to directors of the Company.*
(a)(13) Press Release issued by Parent on July 6, 1999.*
(a)(14) Form of letter dated July 12, 1999, from Gary L.
Neale, Chairman, President and Chief Executive
Officer of Parent, to shareholders of Parent.*
(a)(15) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on
July 14, 1999.
(a)(16) Press Release issued by Parent on July 14, 1999.
(b)(1) Commitment Letter dated June 23, 1999 to Parent
from Credit Suisse First Boston and Barclays Bank
PLC.*
(c) Not Applicable.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
(g)(1) Complaint in NiSource Inc. and CEG Acquisition
Corp. vs. Columbia Energy Group et al., Delaware
Chancery Court, New Castle County.*
(g)(2) Complaint in NiSource Inc. and CEG Acquisition
Corp. vs. Columbia Energy Group et al., United
States District Court, District of Delaware.*
(g)(3) First Amended Complaint in NiSource Inc. and CEG
Acquisition Corp. vs. Columbia Energy Group et
al., United States District Court, District of
Delaware.*
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*Previously filed.
4
SIGNATURE
After due inquiry and to the best of its knowledge and belief,
each of the undersigned certifies that the information set forth in
this statement is true, complete and correct.
CEG ACQUISITION CORP.
By: /s/ Gary L. Neale
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Name: Gary L. Neale
Title: President
NISOURCE INC.
By: /s/ Gary L. Neale
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Name: Gary L. Neale
Title: Chief Executive Officer
Date: July 14, 1999
EXHIBIT INDEX
Exhibit
Number Description
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11(a)(1) Offer to Purchase, dated June 25, 1999.*
11(a)(2) Letter of Transmittal.*
11(a)(3) Letter dated June 25, 1999, from Credit Suisse First
Boston Corporation to brokers, dealers, commercial
banks, trust companies and other nominees.*
11(a)(4) Letter dated June 25, 1999, to be sent by brokers,
dealers, commercial banks, trust companies and other
nominees to their clients.*
11(a)(5) Notice of Guaranteed Delivery.*
11(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
11(a)(7) Form of Summary Advertisement, dated June 25, 1999.*
11(a)(8) Press Release issued by Parent on June 24, 1999.*
11(a)(9) Form of letter dated June 28, 1999 from Gary L. Neale,
Chairman, President and Chief Executive Officer of
Parent, to investors of the Company.*
11(a)(10) Press Release issued by Parent on June 28, 1999.*
11(a)(11) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on July 2,
1999.*
11(a)(12) Form of letter dated July 2, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of
Parent, to directors of the Company.*
11(a)(13) Press Release issued by Parent on July 6, 1999.*
11(a)(14) Form of letter dated July 12, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of
Parent, to shareholders of Parent.*
11(a)(15) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on
July 14, 1999.
11(a)(16) Press Release issued by Parent on July 14, 1999.
11(b)(1) Commitment Letter dated June 23, 1999 to Parent from
Credit Suisse First Boston and Barclays Bank PLC.*
11(g)(1) Complaint in NiSource Inc. and CEG Acquisition Corp.
vs. Columbia Energy Group et al., Delaware Chancery
Court, New Castle County.*
11(g)(2) Complaint in NiSource Inc. and CEG Acquisition Corp.
vs. Columbia Energy Group et al., United States
District Court, District of Delaware.*
11(g)(3) First Amended Complaint in NiSource Inc. and CEG
Acquisition Corp. vs. Columbia Energy Group et al.,
United States District Court, District of
Delaware.*
_________________
*Previously filed.
EXHIBIT 11(a)(15)
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NISOURCE/COLUMBIA
STRAIGHTTALK JULY 14, 1999
DEAR COLUMBIA SHAREHOLDER:
I am sure you have read Columbia's response to NiSource's tender
offer. Most of what Columbia is saying is smoke and seeks to obscure
the issues. Since this is an all-cash offer, we believe there is only
one fundamental issue: price.
Columbia says this is the "wrong price, at the wrong time, and
with the wrong company." Time and again, we have stated that $68 is
only a starting point, and that we are willing to increase our price.
I don't think it could possibly be clearer. The $68 is more than a 10
percent premium to the highest price that Columbia stock has ever
traded. Columbia's statement that our companies are not a strategic
fit is not only irrelevant to Columbia's shareholders, but is also
contrary to the geographic proximity and complementary nature of our
assets and to the opinions of many well-regarded industry experts. Yet
again, they are attempting to obscure the real issue of price.
In rejecting our offer, Columbia referred to seemingly impressive
statistics regarding their performance--a rate of return of 258
percent since January 1, 1995. One important fact they left out is
that the base period of their analysis begins during their bankruptcy.
Analyze performance based on other periods, and Columbia under-
performs both the S&P 500 and the S&P Natural Gas Index.
We agree that Columbia is a terrific company with a unique
collection of assets. That is why we are so committed to pursuing this
transaction. In the absence of a transaction, Columbia cannot commit
to bringing you value equal to our proposal in a reasonable timeframe.
They seem content to let you wait indefinitely for an uncertain
outcome.
In addition, Columbia appears to be intent on making its
shareholders wait an unnecessarily long time before receiving the
premium we are offering. Columbia has said this transaction could take
up to 24 months to complete. However, they do not tell you that this
lengthy period would be a direct consequence of their lack of
cooperation. If Columbia cooperates, we strongly believe that the
merger could be completed within six to nine months. Dominion and CNG
are on a similar timetable in four of the same states where we will
seek approvals, and their transaction is progressing well.
Take a look at the articles that follow. You'll get the true
story of Columbia's rate of return compared to market indices, and we
will give you a clearer picture of the real regulatory process. It's
all straight talk, and I hope you find it helpful.
Undoubtedly, Columbia will continue to put up smoke screens. Look
past them, and remember that the fundamental issue is price. Columbia
has acknowledged that it would consider a transaction at the right
price. What are they waiting for? If you tender your shares, demanding
that Columbia talk to us, I am ready to negotiate.
Gary Neale
President, Chairman and Chief Executive Officer
NiSource Inc.
[Photo of Gary Neale]
[Graphic of Map]
COLUMBIA ENERGY MANAGEMENT: FAILING TO DELIVER SHAREHOLDER VALUE
In rejecting NiSource's offer again on July 5, Columbia discussed the
value it provides to shareholders. As support for its decision,
Columbia offered only one measure of its recent performance. Its
calculations present a 258 percent rate of return since January 1,
1995-- an annualized rate of 33.5 percent. What they neglect to tell
you is that they used the depressed levels at which Columbia traded
during its bankruptcy proceedings as the base for these estimates.
Recalculated off of other periods, the numbers tell a different story.
[Table representing Chart]
4 3 2 1
Year Year Year Year
CAGR CAGR CAGR CAGR
CG 37% 24% 15% 7%
S&P Natural Gas Index 29% 27% 26% 37%
S&P 500 30% 29% 37% 36%
*CAGR = Compound Annual Growth
So where is the value to Columbia's shareholders? These numbers show
that Columbia has actually UNDER-PERFORMED market indices. In saying
the annualized rate of return exceeds that of the S&P 500 and the S&P
Natural Gas Indices, Columbia was only telling part of the story. If
in fact Columbia is seeking to "provide superior value for
shareholders," negotiations with NiSource are not an option, but a
necessity.
COLUMBIA ENERGY MANAGEMENT: DELAYING DELIVERY OF SHAREHOLDER VALUE
NiSource Inc. has stated that it would take six to nine months
for utility regulators to approve a NiSource/Columbia Energy merger,
with Columbia's cooperation. Columbia earlier said the transaction
could take up to 18 to 24 months.
"We understand and respect that it is the job of state regulators
to protect the consumer and maintain a fair and competitive
environment in their state," said Gary Neale, President and CEO of
NiSource. "I am confident that we will work out a plan beneficial to
all constituencies involved in six to nine months."
NISOURCE/BAY STATE GAS
Neale compared the regulatory aspects of the proposed transaction
to NiSource's $780 million acquisition of Bay State Gas Company last
year. Bay State Gas, one of the largest natural gas utilities in New
England, serves more than 300,000 customers in Massachusetts, New
Hampshire and Maine. From the date NiSource filed for approval, state
regulators from the three states approved the transaction in less than
eight months.
STATE FILED APPROVED
Maine 3/20/98 6/12/98
New Hampshire 3/20/98 7/20/98
Massachusetts 3/20/98 11/05/98
As with the Bay State Gas acquisition, NiSource expects a
transaction with Columbia would move through the regulatory process
quickly because, among other things, there will be no changes at the
operating level in the states Columbia currently serves.
"This acquisition is not about employees losing their jobs or
changing how Columbia has serviced their customers," said Neale. "It
is about growing a natural gas distribution corridor between Chicago
and New England and creating a super-regional energy powerhouse
capable of earnings growth in excess of 12 percent per year."
DOMINION/CNG
In a second similar transaction, Dominion Resources Inc. remains
on course to complete a $8.3 billion acquisition of Consolidated
Natural Gas Co. by the end of 1999. The combination of Dominion, the
parent of Virginia Power, and CNG would create the nation's fourth-
largest combined natural gas and electric utility with four million
retail customers in Virginia, North Carolina, Ohio and Pennsylvania.
The Pennsylvania Public Utilities Commission approved the merger on
June 24, 1999 (80 days from filing to approval). The Virginia State
Corporation Commission is expected to issue a final order on November
17, 1999, and action in West Virginia and North Carolina is pending.
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FOR MORE INFORMATION
CALL DENNIS SENCHAK AT
219-647-6085 OR
VISIT NISOURCE
AT WWW.NISOURCE.COM
FOR INFORMATION ABOUT TENDERING
SHARES, CALL INNISFREE M&A AT 877-750-5837
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ONEOK/SOUTHWEST GAS
In a third transaction, ONEOK Inc. is moving forward in its
efforts to acquire Las Vegas-based Southwest Gas. Southwest Gas is
Arizona's principal natural gas utility, serving approximately 650,000
customers. The Public Utilities Commission of Nevada unanimously
approved the transaction on June 22, 1999 (approximately four months
after filing for approval). The transaction still requires the
approval from the Arizona Corporate Commission, California regulators
and shareholders of both utilities.
"Unless Columbia chooses to obstruct the process, we can complete
the transaction within six to nine months, not up to 18 to 24 months,"
stated Neale. "It is our goal as a company to demonstrate how this
transaction would benefit the consumer and foster a fair and
competitive environment in the five states involved."
"For Columbia shareholders, it is time to examine the facts and
ask if their company is acting in the best interest of shareholder
value. It is the time to stand up and send a message to Columbia
management and its board of directors to negotiate a deal with
NiSource that is the right price, at the right time, with the right
company," Neale said.
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This newsletter is neither an offer to purchase nor a solicitation of
an offer to sell shares of common stock of Columbia Energy Group.
Such offer is made solely by the Offer to Purchase, dated June 25,
1999, and the related Letter of Transmittal. It is not being made to,
and tenders will not be accepted from, holders of shares of Columbia
common stock in any jurisdiction in which making or accepting such
offer would not comply with law. In any jurisdiction where a licensed
broker or dealer must make such offer, it shall be deemed made on
behalf of NiSource Inc. by Credit Suisse First Boston or other
registered brokers or dealers licensed in such jurisdiction. The offer
may be extended beyond its August 6, 1999 expiration date. Any
extension will be publicly announced no later than 9:00 a.m., New York
City time, on the next business day. This letter does not constitute a
solicitation of proxies from Columbia Energy Group's stockholders.
Any such solicitation will be made only by separate proxy materials in
compliance with Section 14(a) of the Securities Exchange Act.
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EXHIBIT 11(a)(16)
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FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION, CONTACT:
INVESTORS: Dennis Senchak Rae Kozlowski Wendy Wilson
NiSource Inc. NiSource Inc. Hill & Knowlton
219-647-6085 219-647-6083 312-255-3033
MEDIA: Maria Hibbs Larry Larsen
NiSource Inc. Hill & Knowlton
219-647-6201 312-255-3084
WASSERSTEIN PERELLA JOINS TEAM OF NISOURCE ADVISORS
Merrillville, Ind., July 14, 1999 NiSource Inc. (NYSE: NI)
today announced that it has engaged Wasserstein Perella and Co., Inc.,
to provide advisory services on its tender offer for Columbia Energy
Group. NiSource commenced a $68 cash tender offer for all outstanding
shares of Columbia on June 25.
Wasserstein Perella is a global investment and merchant banking
firm that specializes in providing strategic advice in complex merger
and acquisition situations.
"Wasserstein brings additional firepower to our already strong
team," said Gary Neale, NiSource Chairman, President and Chief
Executive Officer. "Our tender offer is progressing well, and we think
the experience of Bruce Wasserstein will help us expedite the process
and move the transaction forward."
NiSource Inc. is a holding company with a market capitalization
of approximately $3.6 billion whose primary business is the
distribution of electricity, natural gas and water in the Midwest and
Northeast United States. The company also markets utility services
and customer-focused resource solutions along a corridor stretching
from Texas to Maine.
This release is neither an offer to purchase nor a solicitation
of an offer to sell shares of common stock of Columbia Energy Group.
Such offer is made solely by the Offer to Purchase, dated June 25,
1999, and the related Letter of Transmittal. It is not being made to,
and tenders will not be accepted from, holders of shares of Columbia
common stock in any jurisdiction in which making or accepting such
offer would not comply with law. In any jurisdiction where a licensed
broker or dealer must make such offer, it shall be deemed made on
behalf of NiSource Inc. by Credit Suisse First Boston or other
registered brokers or dealers licensed in such jurisdiction. The
offer may be extended beyond its August 6, 1999 expiration date. Any
extension will be publicly announced no later than 9:00 a.m., New York
City time, on the next business day. This release does not constitute
a solicitation of proxies from Columbia Energy Group's stockholders.
Any such solicitation will be made only be separate proxy materials in
compliance with Section 14(a) of the Securities Exchange Act.
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