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Columbia's Hostile Bid for CNG Falls on Deaf Ears

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 Columbia said if CNG does not respond by 5 p.m. today, the offer will be withdrawn.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.

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