NiSource Chairman Gary Neale said his company has been meetingwith shareholders representing more than 30% of Columbia EnergyGroup’s outstanding common stock, including six of the eightlargest shareholders, and has found the investors eager to see thetwo companies begin negotiations on a potential merger transaction.

“These investors are surprised that Columbia’s management hasrefused to meet with us and has stated that the company is ‘notinterested in any merger transaction in which another companyacquires control of Columbia,'” Neale said.

A NiSource spokeswoman added the company has been getting “veryencouraging responses, but I don’t think that implies they wouldvote on this in any particular way at this point. They want to seethe 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 fallsshort of Columbia’s actual value. Columbia has repeatedly rejectedthe offer — most recently in a letter by Columbia CEO Oliver G.(Rick) Richard. In a letter made public on Monday, Richard toldNeale Columbia is “not for sale and is not interested in any mergertransaction in which another company acquires control of Columbia.Our return to shareholders over the last three years supports ourbelief that the best long-term interest of Columbia and itsshareholders is for Columbia to remain an independent company freeto implement over time its strategic business plan,” he added.”Nevertheless, in light of the formal nature of the offer set forthin your letter, your offer will be considered by our board ofdirectors. After the consideration of your offer by our board, wewill advise you of the board’s conclusions.”

The NiSource spokeswoman said her company still has not receivedRichard’s letter, however. “I guess it could be the PostalService,” she added.

Neale said three class-action shareholder lawsuits have beenfiled regarding Columbia’s refusal to negotiate with NiSource. “Wehope these suits, along with the strong support and encouragementwe’ve received this week in our meetings with shareholders, willpersuade Columbia’s board of directors to negotiate with us.”

NiSource plans to continue discussing the transaction withColumbia shareholders. “We are actively encouraging everyshareholder to call, write, e-mail or fax the [Columbia] board ofdirectors with the message that it’s time to come to the table andnegotiate with NiSource,” said Neale.

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