Dynegy board tells investors to accept Icahn offer
NEW YORK
The Federal Energy Regulatory Commission has cleared the way for
the proposed acquisition by Icahn Enterprises LP, the company's
largest shareholder.
Icahn has offered of $665 million for Houston power producer and
Dynegy's board already has accepted Icahn's offer of $5.50 per
share. However, Seneca Capital, Dynegy's second-largest shareholder
has been vocal in its opposition to the deal.
A special committee of Dynegy's board sent shareholders a letter
Friday criticizing Seneca for distributing what the committee said
was misleading information with "exceedingly wishful assumptions
about power markets."
The committee said a continued slump in natural gas prices has
tugged power prices lower since last summer, making it tough for
the company to pay off debt. Accepting Icahn's offer is the best
outcome for Dynegy, it said.
"You have an opportunity to decide whether Dynegy should sell
itself to a financially stronger entity and provide all
stockholders with a known value today, or alternatively, continue
to work through significant financial challenges," the letter
said.
Earlier this week, Icahn extended his offer so that it now will
expire on Monday. About 5.4 million shares, or 4.4 percent of
outstanding Dynegy stock, have been tendered in support of the
deal. At least 50 percent of Dynegy shares must be voted in favor
of the sale for the deal to go through.
Dynegy's shares slipped 4 cents, to $5.70 in afternoon trading
Friday.