According to the Complaint, this action arises from the merger in which Columbia Pipeline was acquired by TransCanada, which closed on July 1, 2016 (the “Merger”). Only one year earlier, on July 1, 2015, NiSource, Inc. (“NiSource”) separated Columbia Pipeline, a then-wholly-owned subsidiary, into a stand-alone publicly traded company (the “Spinoff”). Less than one year after the Spinoff, on March 17, 2016, Columbia Pipeline announced it had entered into an agreement and plan of merger to be acquired by TransCanada, pursuant to which Columbia Pipeline shareholders would receive $25.50 per share in cash (the “Merger Agreement”). The transaction was valued at $13 billion, including the assumption of Columbia Pipeline debt.
On May 17, 2016, the Company filed its definitive proxy statement with the SEC (the “Proxy”). The Complaint alleges that many of the representations made to Columbia Pipeline shareholders in the Proxy were false and misleading. Specifically, the Proxy failed to disclose that Columbia Pipeline and its executive officers: (1) conspired to engineer the Spinoff from NiSource, and ultimate sale of the Company to TransCanada, as part of a self-interested plan to cash in on lucrative change-in-control benefits; (2) concealed TransCanada’s prior expressions of interest to purchase the Pre-Spinoff Entities directly from NiSource; (3) excluded prospective buyers, other than TransCanada, from bidding on the Company, thereby preferencing TransCanada to the detriment of Columbia Pipeline shareholders; (4) negotiated standstill agreements, and waivers therefrom, with various prospective buyers to rush to consummate the Merger with TransCanada, thereby triggering the change-in-control benefits; and (5) did not negotiate to maximize the value of Columbia Pipeline shares in the Merger.