National Fuel Gas asks shareholders to reject New Mountain Vantage's nominees for election to the board

By Lisa Kerner

Charlotte, N.C., Dec. 28 - National Fuel Gas Co. urged its shareholders to support the company's slate of nominees for election to the board and to reject the slate put forth by the "dissident shareholder group" headed by the hedge fund New Mountain Vantage Advisors, LLC.

A copy of chairman and chief executive officer Philip C. Ackerman's letter to National Fuel shareholders was included in a form 8-K filing with the Securities and Exchange Commission.

New Mountain's nominees would replace current directors Robert Brady, Rolland Kidder and John Riordan with outsiders who "lack the necessary experience and expertise and the personal commitment to your company that characterize our incumbent directors," the letter stated.

In addition, New Mountain's nominees would then "seek to influence the strategic direction of our company," according to Ackerman.

It was previously reported that New Mountain will nominate David DiDomenico, F. Fox Benton III and Frederic Salerno for election to the company's board of directors at National Fuel's 2008 annual meeting.

National Fuel said it considered New Mountain's strategic proposals. However, the company does not believe that implementing New Mountain's suggestions is in the best interest of National Fuel shareholders.

In closing, Ackerman said National Fuel's strategy for managing and developing its assets has consistently delivered "superior returns" to shareholders. He also noted National Fuel's record of paying dividends for the last 105 consecutive years with consecutive annual dividend increases for the last 37 years.

In November, New Mountain reiterated its recommendation that National Fuel sell its non-core operations for proceeds of an estimated $450 million.

New Mountain also wants National Fuel to eliminate the 10% poison pill and its staggered board.

When New Mountain announced its nominees in October, it owned 8,078,606 shares, or 9.7%, of the Williamsville, N.Y., diversified energy company.

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