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NiSource Discusses Purchase with Columbia Shareholders

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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