Columbia's Hostile Bid for CNG Falls on Deaf Ears
Columbia Gas extended the deadline 24 hours for a CNG decision
on its definitive merger offer yesterday. Columbia said if CNG does
not respond by 5 p.m. today, the offer will be withdrawn.
CNG made no decision while the minutes counted down on the original
deadline. Columbia said the extension was caused by a written
transmission from CNG requesting more time. This marks the second time
Columbia has extended its deadline. Last week, the Virginia-based
energy company extended the offer until 5 p.m. yesterday. Columbia's
original hostile bid was made in April (See Daily GPI, April 20). The proposal offered
CNG stockholders $70/share consisting of $45.50 in cash and $24.50 in
Columbia shares, adding up to $6.7 billion. The actual number of
Columbia shares to be issued for each CNG share would be based on
Columbia's stock price during a period immediately prior to closing
and would be subject to a collar provision.
Dominion Resources said a Columbia merger would require lengthy
regulatory review. Dominion originally bought CNG in late February for
$6.1 billion in stock, which represents a 25% premium on CNG's stock
price (See Daily GPI, Feb. 23).
"Columbia Gas has admitted that its unsolicited bid will take at
least nine months longer to close than the definitive merger
agreement which CNG and Dominion Resources have had in place since
February," said Thos. E. Capps, CEO of Dominion Resources. "This
renders Columbia's latest statement hollow and meaningless."
Neither CNG nor Columbia would comment on the situation.
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.