NiSource Chairman Gary Neale yesterday called on Columbiaofficials to provide detailed information to shareholders regardingincreased “golden parachutes” approved last week for 30 Columbiaofficials. In a letter to Columbia CEO Oliver G. (Rick) RichardIII, Neale also said he was “distressed to hear that you and yourchief financial officer, Mike O’Donnell, repeatedlymischaracterized the financing” of NiSource’s $68/share hostiletakeover offer ($5.7 billion) to Columbia shareholders during anearnings teleconference last week (see Daily GPI July 16, July 15,June25, June 11 and June 8).

In response to direct questions from two of Columbia’s largestinvestors, “you and your CFO avoided the truth, saying you refusedto meet with us because of the so-called risk that Columbiashareholders will not get the cash due to the ‘huge equity takeoutrequired to do the financing.’ This explanation is absurd.”Columbia shareholders will be paid $68/share at the time ofclosing, he said. “You know full well that any requirement forequity would occur as part of a refinancing after the merger,” saidNeale. “Therefore, I expect you to publicly correct this falsestatement.”

Neale also said Richard failed to inform Columbia’s shareholdersthat the day prior to the conference call Columbia’s boardsubstantially increased the “golden parachutes” for Richard; PeterM. Schwolsky, senior vice president and chief legal officer;Catherine G. Abbott, president and CEO of Columbia Gas Transmissionand Columbia Gulf; and 27 other officers and managers. At a specialmeeting on July 14, Columbia’s board considered the “potentiallydestabilizing effects” of the NiSource tender offer on the “moraleand retention” of it employees and decided to amend employmentagreements with those officials, increasing their monetarycompensation in the event of lost employment due to a takeover byanother company. On Columbia shareholders’ “behalf, we call on youto provide the necessary information to enable shareholders tocalculate the true cost of these increases,” said Neale.

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