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Court Speeds Up Columbia Case

Court Speeds Up Columbia Case

The Chancery Court of Delaware is stepping up the pace on a lawsuit filed on June 24 against Columbia Energy Group by NiSource, NiSource said yesterday. The court has called for an accelerated schedule for the case in which NiSource is seeking to compel Columbia to reopen its 1999 annual meeting so that another director can be elected to a vacant seat on Columbia's board.

Only four directors were elected at Columbia's annual meeting last month even though five directors were required to be elected to maintain a minimum number dictated by Columbia's certificate of incorporation and by-laws, according to NiSource. NiSource intends to nominate a director to fill the vacant seat as part of its effort to buy Columbia for $68/share, or about $5.7 billion. NiSource said it also intends to nominate a slate of directors to Columbia's board at Columbia's next annual meeting.

NiSource took its unsolicited offer to Columbia shareholders last Friday and plans to keep it on the table until Aug. 6. Meanwhile, Columbia has urged its shareholders to take no action until its board has reviewed the transaction.

Columbia's board rejected the same offer earlier this month, and Columbia CEO Oliver G. (Rick) Richard III said the company is "not for sale and is not interested in any merger transaction in which another company acquires control of Columbia." Columbia is considering a significant share repurchase program potentially including 10% of its outstanding shares as an interim way to enhance shareholder value and turn around Columbia's recent poor stock performance, a report by PaineWebber stated.

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