======================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
SCHEDULE 14D-1/A
(Amendment No. 12)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
----------------------------
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)
----------------------------
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
======================================================
This Amendment No. 12 (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 29, 1999, Parent and Offeror filed a complaint in
Delaware Chancery Court, New Castle County, which is included herein
as Exhibit (g)(4) 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.*
(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
3
July 14, 1999.*
(a)(16) Press Release issued by Parent on July 14, 1999.*
(a)(17) Press Release issued by Parent on July 19, 1999.*
(a)(18) Press Release issued by Parent on July 20, 1999.*
(a)(19) Form of letter dated July 21, 1999, from Gary L.
Neale, Chairman, President and Chief Executive
Officer of Parent, to directors of the Company.*
(a)(20) Form of letter dated July 26, 1999, from Gary L.
Neale, Chairman, President and Chief Executive
Officer of Parent, to stockholders of the
Company.*
(a)(21) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on
July 26, 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.*
(g)(4) Complaint in NiSource Inc., NiSource Capital Markets
Inc. and CEG Acquisition Corp. vs. Columbia Energy
Group et al., Delaware Chancery Court, New Castle
County.
_______________
*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
---------------------------
Name: Gary L. Neale
Title: President
NISOURCE INC.
By: /s/ Gary L. Neale
---------------------------
Name: Gary L. Neale
Title: Chief Executive Officer
Date: July 29, 1999
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
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(a)(17) Press Release issued by Parent on July 19, 1999.*
11(a)(18) Press Release issued by Parent on July 20, 1999.*
11(a)(19) Form of letter dated July 21, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of
Parent, to directors of the Company.*
11(a)(20) Form of letter dated July 26, 1999, from Gary L. Neale,
Chairman, President and Chief Executive Officer of
Parent, to stockholders of the Company.*
11(a)(21) "NiSource/Columbia StraightTalk" communication to
stockholders of the Company issued by Parent on July
26, 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.*
11(g)(4) Complaint in NiSource Inc., NiSource Capital Markets
Inc. and CEG Acquisition Corp. vs. Columbia Energy
Group et al., Delaware Chancery Court, New Castle
County.
_________________
*Previously filed.
EXHIBIT 11(g)(4)
----------------
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
NISOURCE INC., NISOURCE CAPITAL )
MARKETS INC. and CEG ACQUISITION )
CORP., )
)
Plaintiffs, )
)
v. ) Civil Action No. _____
)
COLUMBIA ENERGY GROUP, RICHARD )
F. ALBOSTA, ROBERT H. BEEBY, )
WILSON K. CADMAN, JAMES P. HEFFERNAN, )
KAREN L. HENDRICKS, MALCOLM T. )
HOPKINS, J. BENNETT JOHNSTON, )
MALCOLM JOZOFF, WILLIAM E. LAVERY, )
GERALD E. MAYO, DOUGLAS E. OLESEN and )
OLIVER G. RICHARD III, )
)
Defendants.
VERIFIED COMPLAINT
------------------
Plaintiffs NiSource Inc. ("NiSource"), NiSource Capital
Markets Inc. ("NCM"), and CEG Acquisition Corp. ("Acquisition Corp.")
(collectively, "Plaintiffs"), by their undersigned attorneys and upon
knowledge as to themselves and otherwise upon information and belief,
state as follows for their complaint against defendants:
1. This is an action for preliminary and permanent
injunctive relief enjoining defendants from carrying out a share
buyback program (the "Buyback") approved by the board of defendant
Columbia Energy Group ("CEG" or the "Company") on or about July 14,
1999, authorizing the expenditure of up to $400 million for the
purchase of shares of CEG common stock on the open market. Injunctive
relief is necessary because the Buyback constitutes an invalid and
illegal defensive measure in response to the tender offer announced by
plaintiffs NiSource and Acquisition Corp. on June 24, 1999 and
commenced on June 25, 1999 (the "Tender Offer"), for all outstanding
shares of CEG for $68 cash. As detailed below, the Buyback
constitutes a violation of the director defendants' fiduciary duties,
as it is not a proportionate or reasonable response to any legitimate
threat posed by the Tender Offer. Rather, the Buyback was motivated
by the desire of the director defendants to entrench themselves in
office, and is intended to inhibit or preclude the success of the
Tender Offer to the detriment of the Company's shareholders.
2. As described in detail below, in the context of a
highly regulated industry, a staggered board of directors and a bylaw
provision precluding shareholder action by written consent, the
history of steps adopted by defendants since learning of NiSource's
interest in acquiring CEG demonstrates that defendants are motivated
by a desire for entrenchment, rather than proper regard for the
interests of the shareholders. Defendants' entrenchment measures
include agreeing to meet with NiSource and canceling the same without
explanation, making a hostile takeover bid for another energy company
(nevertheless claiming that CEG desires to remain independent),
condemning NiSource's attempt to negotiate with CEG as an unsolicited
and unprecedented bid (despite CEG's own unsolicited bid for CNG),
depriving CEG's shareholders of the opportunity to elect the number of
directors legally required to sit on its board, making a series of
false and misleading statements concerning NiSource's tender offer,
and the adoption of unprecedented parachute agreements for the three
senior-most officials of the Company and lucrative parachute
agreements for a group of twenty-seven other executives. Those
entrenchment efforts have now culminated in the massive, unreasonable
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Buyback, which is designed to preclude Plaintiffs from succeeding on
their Tender Offer and is not a reasonable response to that Offer
under the circumstances.
PARTIES
-------
3. Plaintiff NiSource is an Indiana corporation with its
principal place of business at 801 East 86th Avenue, Merrillville,
Indiana 46410, and its registered office at 5265 Hohman Avenue,
Hammond, Indiana 46320.
4. Plaintiff NCM is a wholly owned subsidiary of NiSource
and is an Indiana corporation with its principal place of business at
801 East 86th Avenue, Merrillville, Indiana 46410. NCM is an owner of
CEG common stock.
5. Plaintiff Acquisition Corp. is a Delaware corporation
with its principal place of business at 801 East 86th Avenue,
Merrillville, Indiana 46410. Acquisition Corp. is a wholly owned
subsidiary of NiSource.
6. Defendant CEG is a Delaware corporation with its
principal place of business at 13880 Dulles Corner Lane, Herndon,
Virginia 20171. CEG's common stock is listed and traded on the New
York Stock Exchange.
7. Defendant Oliver G. Richard ("Richard") was at all
relevant times the Chief Executive Officer, Chairman, and President of
CEG.
8. Defendants Richard, Richard F. Albosta, Robert H.
Beeby, Wilson K. Cadman, James P. Heffernan, Karen L. Hendricks,
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Malcolm T. Hopkins, J. Bennett Johnston, Malcolm Jozoff, William E.
Lavery, Gerald E. Mayo and Douglas E. Olesen (collectively, the
"Director Defendants") are the directors of CEG. By reason of their
positions with the Company, the Director Defendants owe to the CEG
shareholders and the Company the highest obligations of good faith,
fair dealing, due care, loyalty and candid and full disclosure
consistent with their fiduciary duties.
BACKGROUND OF THE ACTION
------------------------
9. On April 1, 1999, Gary L. Neale ("Neale"), the Chairman
and Chief Executive Officer of NiSource, met with Richard to discuss a
possible merger of the two companies. During this meeting, Neale
proffered a letter to Richard proposing an all-cash, all shares
acquisition of CEG by NiSource at a premium price of $63 per share.
The letter set forth the proposed terms of the deal and expressed
NiSource's desire "to discuss this proposal at greater length."
Richard's response to the letter was a request that NiSource withdraw
the offer and that the two meet on April 16, 1999 for further
discussions. NiSource agreed to do so based on Richard's
representation that he was willing to meet and talk.
10. However, on April 15, 1999, the day before the
scheduled meeting between NiSource and CEG, Richard unilaterally
canceled the meeting with Neale, without providing any explanation.
11. On April 16, 1999, Neale wrote again to Richard, once
again indicating NiSource's desire to discuss a friendly merger of CEG
and NiSource, and proposing immediate discussions to address how the
merger could be structured on a negotiated basis.
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12. On April 18, 1999, Richard dismissed NiSource's offer
indicating that CEG was not for sale and stating the desire for CEG to
"remain[] independent." Richard went so far as to state that "there
is no interest in negotiating any transaction with [NiSource]."
Instead, in an effort to deflect NiSource's advances and prevent
another company from acquiring control of CEG, on or about April 18
CEG took the extraordinary step of commencing a bid to acquire
Consolidated Natural Gas Company ("CNG"), which already had entered
into a definitive and binding merger agreement with another company,
Dominion Resources, Inc. ("Dominion"). CEG's unsolicited bid to break
up the friendly merger between CNG and Dominion ultimately failed.
13. Against this background, at CEG's annual meeting of
shareholders on May 19, 1999, at which five directors were to be
elected, CEG's Board of Directors proposed a slate of only four
directors for shareholder vote. The effect of Defendants' failure to
provide the shareholders with an opportunity to elect a fifth
director, to succeed retiring director William Wilson, was to ensure
that the Director Defendants would not be confronted with the
independent judgment of a non-incumbent director during a time when
the Director Defendants were committed to presenting a unified front
to resist NiSource's advances.
14. NiSource's bankers subsequently sought to contact the
bankers for CEG to pursue the potential for a negotiated merger of the
companies. On May 28, 1999, CEG's bankers advised that CEG was
unwilling to engage in discussions.
-5-
15. On June 7, 1999, Neale again wrote to Richard advising
of NiSource's continued interest in exploring a merger on negotiated
terms and proposing an acquisition of CEG by NiSource for an increased
premium price of $68 per share. In that letter, made public by
NiSource the same day, Neale again offered to discuss the terms of
such a proposal with Richard and indicated NiSource's preference for
"work[ing] together with [Mr. Richard] and [the CEG] Board to complete
a transaction."
16. By letter dated June 7, 1999, Richard responded to
Neale, advising that CEG was not for sale and that CEG was "not
interested in any merger transactions in which another company
acquires control of [the Company]." Nevertheless, Richard stated that
in light of the formal offer by NiSource, he would present the offer
of $68 per share to CEG's Board.
17. On June 10, 1999, the CEG Board met ostensibly to
consider the NiSource offer of $68 per share. Despite the fact that
less than 72 hours had passed since the offer was made, and without
adequate consideration of the offer or even discussing with NiSource
either the offer or possible alternative proposals, CEG's Board flatly
rejected the $68 offer. In a June 10, 1999 letter to Neale describing
the rejection of the NiSource offer, Richard stated that the Board had
concluded that the proposed consideration was inadequate, even though
the offer represented a premium of 31% above the average trading price
of CEG's stock for the twenty day trading period preceding the offer.
Richard's letter foreclosed any discussion of the offer from NiSource
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and flatly stated that the "decision not to pursue [NiSource's]
proposal is final."
THE TENDER OFFER COMMENCES
--------------------------
18. Despite NiSource's continued desire to conclude a
negotiated transaction, CEG's lack of a constructive response combined
with CEG's definitive statement that it would not consider a
transaction with NiSource led NiSource and Acquisition Corp. to
commence their Tender Offer on June 25, 1999, in order to ensure that
its premium bid of $68 would be brought to CEG's shareholders for
their consideration.
Pursuant to the Tender Offer, NiSource and Acquisition Corp.
seek to purchase for cash all outstanding shares of CEG at $68 per
share. The price NiSource offered CEG's shareholders represents a
premium of 22% above the reported closing price of CEG's common stock
on June 4, 1999, the day before NiSource and Acquisition Corp.
publicly offered to acquire CEG, and is 31% above the average trading
price of CEG's stock for the twenty day trading period preceding the
Tender Offer.
20. The Tender Offer is made in contemplation of a business
combination between Plaintiffs and CEG at a price of $68 per share
(the "Merger"). The Tender Offer is not "front-end loaded" -- that
is, the consideration offered is not part cash and part stock, and it
does not offer a higher price than non-tendering shareholders would
receive in the Merger. Nor is the Tender Offer coercive, as it offers
all cash consideration and treats all CEG shareholders equally.
-7-
Moreover, NiSource has made clear to CEG that it remains willing to
discuss an increase in the Tender Offer price.
21. CEG's shareholders -- the owners of the company -- have
the right to consider NiSource's premium offer without undue
interference from Defendants, and Defendants should permit the
shareholders to make their own decisions as to the long-term direction
of the Company. The Tender Offer in no way threatens the interests of
CEG or its shareholders. Accordingly, there is no justification for
Defendants' efforts to obstruct and interfere with NiSource's premium
bid.
DEFENSIVE MEASURES AND OTHER OBSTACLES TO THE MERGER
-----------------------------------------------------
22. Prior to commencement of the Tender Offer, the Company
already had several obstacles to an unsolicited takeover in place.
For example, Article IV of the Company's Certificate prohibits
shareholder action by written consent. Shareholder action may only be
effectuated at an annual meeting, or at a special meeting, which can
be called only by the CEG Board. Thus, the first opportunity that
CEG's shareholders will have to vote on matters relating to the Tender
Offer is in May of 2000, the date of the next scheduled annual
meeting.
23. In addition, the Company's Board is divided into three
separate classes, with each director in each class serving a three-
year term. The directors may only be removed for cause by the
affirmative vote of 80% of the holders of CEG's voting stock. Under
the present constitution of CEG's Board, therefore no party can gain
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control of the Company's Board without Board consent prior to the
passage of at least two annual meetings.
24. The regulatory process associated with mergers
involving public utility companies constitutes yet another hurdle
which bolsters the effectiveness of the Company's defensive measures.
In order to consummate a merger, the Company will be required to
obtain approval from the Federal Energy Regulatory Commission, as well
as state regulatory approval from each state in which the Company
operates. This regulatory process involves delay and difficulties
even in the context of friendly mergers. Absent CEG's cooperation,
NiSource will face serious obstacles as a hostile bidder, including
resistance from the Company and the Director Defendants.
25. On July 14, 1999, the Director Defendants took a number
of steps to entrench themselves, authorizing the amendment of
employment agreements for three of the Company's top executives.
These amended employment agreements provide CEG's executives with
substantial severance benefits worth tens of millions of dollars that
may be triggered by the executives' voluntary departure from the
Company upon specified change of control events, even before
implementation or integration associated with any business combination
has begun. These amended agreements are designed to deter third party
bidders from making a bid for the Company. The Director Defendants
also purported to authorize the creation of "golden parachute"
agreements for 27 other members of the Company's management. The
Director Defendants also acted to disenfranchise the Company's
shareholders by including provisions in the golden parachute
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agreements whereby substantial payments will be triggered if the CEG
shareholders vote in a slate of directors proposed by a hostile
bidder.
26. Also on July 14, 1999, and in direct response to the
Tender Offer, the Director Defendants instituted the Buyback. In
February 1999, when CEG's shares were trading near $50 per share,
CEG's Board had authorized a repurchase of only $100 million of its
common stock (and thereafter actually had repurchased only $80 million
of stock). Nonetheless, after NiSource's Tender offer, the Board
approved the Buyback, which authorized the purchase of an additional
$400 million of CEG's common stock at a time when that stock was
trading at more than $60 per share.
27. Pursuant to the Buyback, the director defendants
authorized an additional $400 million to be used to fund CEG's open
market share repurchase program (or four times the amount authorized
prior to the Tender Offer), bringing the total amount now available
for stock purchases to approximately $420 million. The Buyback is to
be effected by open market or block purchases, or in privately
negotiated purchases, between the effective date thereof and July 14,
2000. The Buyback is an unreasonable defensive measure and has been
implemented by defendants in furtherance of their own self-interested
entrenchment motive.
28. By rejecting the repeated efforts of Plaintiffs to
discuss a proposed negotiated merger, and by rejecting the Tender
Offer and disseminating disparaging statements about the same,
defendants have demonstrated that they will not approve the Tender
-10-
Offer or any other offer by Plaintiffs, such that a business
combination between NiSource and CEG would be exempt from the
provisions of 8 DEL. C. Section 203. Accordingly, NiSource will be
prohibited from merging with CEG for a period of three years unless,
INTER ALIA, Plaintiffs succeed in acquiring 85% of the outstanding
shares of the Company pursuant to the Tender Offer. By instituting
the Buyback, the defendants are effectively precluding the CEG
shareholders from receiving the benefit of NiSource's all-cash premium
Tender Offer, as the Buyback is intended and threatens to preclude
Plaintiffs from reaching the 85% threshold which is relevant for
purposes of Section 203. If the Company is permitted to consummate
the Buyback, at an average purchase price of $61 13/16 per share (the
price at which CEG stock was trading as of the close of business on
July 28, 1999), it will succeed in retiring approximately 8.25% of the
outstanding stock of CEG. Once those shares have been purchased by
CEG pursuant to the Buyback, they will not be available for
acquisition by Plaintiffs.
29. The Tender Offer poses no threat to the Company or its
stockholders. It is an all-cash proposal that is not coercive and
treats all CEG shareholders equally, and in fact NiSource has
indicated that it is willing to discuss an increase in the Tender
Offer price. Thus, the Director Defendants have no reasonable grounds
for concluding that a danger to the Company or its shareholders
exists. Nevertheless, the Director Defendants have wrongfully
instituted the Buyback, which constitutes a defensive measure in
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response to the Tender Offer, with the intent of entrenching
themselves in office in violation of their fiduciary duties.
30. According to defendants, the only "threat" posed by the
Tender Offer is financial; I.E., the Tender Offer price supposedly is
inadequate. Even assuming the Tender Offer price is inadequate,
however, in light of the defensive measures already in place and the
other obstacles to the Tender Offer discussed above, the Buyback
constitutes a defensive measure that is not a reasonable response to
such a "threat." Indeed the Buyback itself threatens the viability of
the Tender Offer, which includes as a condition that the restrictions
on business combinations under Section 203 not apply to the Tender
Offer or proposed merger. By acquiring 8..25% or more of CEG's
outstanding stock, defendants ultimately may precipitate the
withdrawal of the Tender Offer, to the detriment of all CEG
shareholders.
31. Unless the Court enjoins the Company from acquiring any
further shares of its common stock pursuant to the Buyback, Plaintiffs
and the other shareholders of CEG will suffer immediate, serious, and
irreparable injury in the following respects, among others:
a. CEG shareholders will be deprived of an
opportunity to tender their shares at the significant premium pursuant
to the Tender Offer; and
b. Plaintiffs will be deprived of the opportunity to
acquire control of and enter into a business combination with CEG, a
unique business opportunity that may never recur.
32. Plaintiffs have no adequate remedy at law.
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WHEREFORE, Plaintiffs respectfully request that this Court
enter an order:
a. Preliminarily and permanently enjoining Defendants
from causing the Company to acquire its common stock pursuant to the
Buyback;
b. Awarding Plaintiffs the costs associated with this
action, including reasonable attorneys' fees; and
c. Such further relief as the Court deems just and
proper.
POTTER ANDERSON & CORROON LLP
Of Counsel: By _________________________
Robert K. Payson
Paul E. Dengel Arthur L. Dent
SCHIFF HARDIN & WAITE Philip A. Rovner
6600 Sears Tower Gregory M. Johnson
Chicago, IL 60606 Hercules Plaza
(312) 258-5500 1313 N. Market Street
P. O. Box 951
Michael J. Chepiga Wilmington, Delaware 19899
SIMPSON THACHER & BARTLETT
425 Lexington Avenue Attorneys for Plaintiffs
New York, NY 10017 NiSource Inc., NiSource Capital
(212) 455-2000 Markets Inc. and
CEG Acquisition Corp.
Dated: July 29, 1999
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