Dynegy calls Seneca proposals disruptive

NEW YORK (BestGrowthStock) – Power company Dynegy (DYN.N: ) on Friday urged shareholders to reject a proposal by hedge fund Seneca Capital which would remove its CEO Bruce Williamson and another director from Dynegy’s board.

Seneca, a significant shareholder in Dynegy, had resisted a $602 million offer to buy the power company from private equity firm Blackstone Group (BX.N: ). Seneca, along with billionaire Carl Icahn, had argued the $5 a share offered was too low.

The deal recently collapsed after failing to win shareholder support, likely forcing the debt-heavy company to find another buyer, sell assets or restructure.

Seneca instead proposed removing Dynegy’s CEO and director David Biegler from the Board and nominated its own two candidates.

Dynegy, in a letter to stockholders released on Friday, said removing two directors, as proposed by Seneca, would be disruptive to the strategic alternatives it was planning.

However, it has agreed to undertake certain studies, reviews and evaluations suggested by Seneca.

Dynegy has also said it would engage with Seneca about appointing an independent candidate to its board, which currently has six members, five of whom are independent.

Dynegy’s shares closed 8 cents lower at $5.05.

(Editing by Sofina Mirza-Reid)

Dynegy calls Seneca proposals disruptive