Columbia Energy Group, a Herndon-based energy company with extensive natural gas holdings, put itself more publicly on the auction block yesterday--disclosing talks with other potential bidders and asking hostile suitor NiSource Inc. to stand still on its $74-a-share offer in the interim.
Columbia said in a filing with the Securities and Exchange Commission that it is negotiating with "numerous third parties" regarding "possible strategic transactions, including mergers and other business combination transactions and purchases of a material amount of the company's stock or assets."
At the same time, it sent NiSource a proposed confidentiality agreement and invited the Merrillville, Ind., company into the process as well. NiSource Chairman Gary Neale responded yesterday by extending the company's $6.1 billion takeover offer to midnight Dec. 10. The $74-a-share bid, which Columbia rejected last month as inadequate, was set to expire at midnight tonight.
"We have been invited to enter the process established by the Columbia board," said Neale, explaining the extension of the offer. Neale said the company remains "confident that the NiSource offer is the most compelling opportunity for Columbia and all its constituencies."
In its proposed confidentiality agreement with NiSource, Columbia asked NiSource not to amend its $74-a-share offer until after March 1.
Donato J. Eassey, an industry analyst with Merrill Lynch in Houston, said the proposed agreement was essentially a standstill agreement that allows Columbia to shop itself.
"I think Columbia is doing what is right for shareholders making certain that the $74 a share is full and fair value," Eassey said.
Columbia declined to say how many third parties were involved or who they were.