NiSource Discusses Purchase with Columbia Shareholders
NiSource Chairman Gary Neale said his company has been meeting
with shareholders representing more than 30% of Columbia Energy
Group's outstanding common stock, including six of the eight
largest shareholders, and has found the investors eager to see the
two companies begin negotiations on a potential merger transaction.
"These investors are surprised that Columbia's management has
refused to meet with us and has stated that the company is 'not
interested in any merger transaction in which another company
acquires control of Columbia,'" Neale said.
A NiSource spokeswoman added the company has been getting "very
encouraging responses, but I don't think that implies they would
vote on this in any particular way at this point. They want to see
the companies sit down and work out a deal."
NiSource has offered to acquire Columbia for $5.7 billion, or
$68 per share in cash, an amount several analysts have said falls
short of Columbia's actual value. Columbia has repeatedly rejected
the offer --- most recently in a letter by Columbia CEO Oliver G.
(Rick) Richard. In a letter made public on Monday, Richard told
Neale Columbia 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," he added.
"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."
The NiSource spokeswoman said her company still has not received
Richard's letter, however. "I guess it could be the Postal
Service," she added.
Neale said three class-action shareholder lawsuits have been
filed regarding Columbia's refusal to negotiate with NiSource. "We
hope these suits, along with the strong support and encouragement
we've received this week in our meetings with shareholders, will
persuade Columbia's board of directors to negotiate with us."
NiSource plans to continue discussing the transaction with
Columbia shareholders. "We are actively encouraging every
shareholder to call, write, e-mail or fax the [Columbia] board of
directors with the message that it's time to come to the table and
negotiate with NiSource," said Neale.
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