SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
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
NISOURCE INC.
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(Exact Name of Registrant as Specified in Its Charter)
INDIANA 1-9779 35-1719974
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(State or Other Jurisdiction of Incorporation)
(Commission File Number) (IRS Employer Identification No.)
801 E. 86TH AVENUE, MERRILLVILLE, INDIANA 46410
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (219) 853-5200
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On June 7, 1999, the Registrant announced a proposal to
acquire Columbia Energy Group. A copy of the Registrant's press
release dated June 7, 1999 is filed as an exhibit to this report and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits. The following exhibit is filed herewith:
99.1 Press release dated June 7, 1999.
SIGNATURE
Pursuant to the requirement 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.
NISOURCE INC.
(Registrant)
Dated: June 7, 1999 By: /s/ Nina M. Rausch
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Name: Nina M. Rausch
Title: Secretary
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION, CONTACT:
INVESTORS: Dennis Senchak Wendy Wilson
Rae Kozlowski Hill & Knowlton
NiSource Inc. 312-255-3033
219-647-6083
MEDIA: Kris Falzone Larry Larsen
NiSource Inc. Hill & Knowlton
219-647-6201 312-255-3084
NISOURCE INC. OFFERS $68 PER SHARE FOR COLUMBIA ENERGY GROUP
COMBINATION WOULD CREATE SUPER-REGIONAL ENERGY COMPANY
Merrillville, Ind., June 7, 1999 NiSource Inc. (NYSE: NI)
announced today that it has offered to acquire Columbia Energy Group
(NYSE: CG) for $5.7 billion, or $68 per share in cash. The offer is
not subject to any financing contingency. The price represents a 30.7
percent premium over the average closing share price for Columbia
common stock for the 20 trading days ended Friday, June 4, 1999. A
copy of the offer letter is attached.
NiSource Chairman, President and Chief Executive Officer Gary L.
Neale said, "We're announcing this offer after a formal offer to the
Columbia Board of Directors was rejected, repeated requests for
discussion were ignored and Columbia's financial advisors informed us
on May 28 that the company was unwilling to talk with us. We believe
that all constituencies will find this offer to be so compelling that
Columbia's Board will no longer be able to ignore it."
Neale noted that the proposal is an outstanding offer for
shareholders of both companies. "The acquisition is in line with
NiSource's stated strategy of growing a natural gas distribution
corridor between Chicago and New England. This combination will
create a super-regional powerhouse capable of earnings growth in
excess of 12 percent per year primarily from our core businesses. For
Columbia's shareholders, the offer represents full and fair value in a
six- to nine-month timeframe with little regulatory risk. For
NiSource's shareholders, this transaction is accretive in the first 12
months with minimal synergies required."
The combination will make NiSource one of the largest natural gas
companies in the country with 4 million distribution customers,
pipelines connecting the Texas Gulf and the Atlantic coast, one of the
largest natural gas storage providers in the country and complete Btu
management services for customers. "The acquisition also delivers on
NiSource's well-defined strategy to create a distribution value chain
around our gas and electric businesses, bringing useful products and
services to our customers as well as superior financial returns to our
shareholders," Neale said.
NiSource 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 contains forward-looking statements as defined in
Section 21 E of the Securities Exchange Act of 1934, including
statements about future business operations, financial performance and
market conditions. Such forward-looking statements involve risks and
uncertainties inherent in business forecasts.
NiSource's financial advisor is Credit Suisse First Boston.
Legal counsel includes Schiff Hardin & Waite, Simpson Thacher &
Bartlett, and Dewey Ballantine.
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LETTER SENT ON NISOURCE PRESIDENT, CHAIRMAN, CEO GARY L. NEALE
LETTERHEAD
June 7, 1999
Mr. Oliver G. Richard III
Chairman, President and Chief Executive Officer
Columbia Energy Group
13880 Dulles Corner Lane, Suite 400
Herndon, VA 20171-4600
Dear Rick:
On April 1 at your offices in Herndon, Virginia, I gave you a letter
with an all cash offer for Columbia. You asked that I withdraw that
offer and that we meet on April 16 for further discussion. Instead,
you canceled the meeting the day before, forcing us to send you a
written offer on April 16. Two days later, you summarily dismissed
our offer and launched your unsuccessful bid for CNG. We subsequently
tried to reopen discussion through our respective bankers. On May 28
our bankers were told that you were unwilling to engage in any further
discussion.
A merger of our two companies has substantial benefits to our
respective shareholders, customers, and employees. Unfortunately,
your refusal to discuss these benefits leaves us no alternative but to
go public with our proposal.
Therefore, NiSource hereby offers to acquire Columbia in a merger
transaction in which Columbia shareholders would receive $68 per
share, in cash. This represents a 30.7% premium over the average
closing share price for Columbia's common stock for the 20 trading
days ended Friday, June 4, 1999, and a premium to your all-time high
stock price. We are confident that your shareholders will
enthusiastically support our proposal.
No further action on the part of our Board is required. Our proposal
is not subject to any financing contingency, but only to customary
conditions, including the execution of a definitive merger agreement
and usual regulatory approvals. Our counsel has studied our
companies' businesses, and we do not believe that our proposal raises
any substantive regulatory or anti-trust issues. Indeed the
combination would foster customer choice and further increase
competition in the energy industry.
Although we have found it necessary to make our proposal public, we
continue to prefer to work together with you and your Board to
complete a transaction. We believe negotiations can be completed very
quickly and are prepared to commit all necessary resources to work
with you. If you continue to be unwilling to engage in meaningful
negotiations with us, however, we intend to take this offer directly
to your stockholders.
We hope to hear from you promptly.
Sincerely,
Gary L. Neale
cc: Board of Directors
