UPDATE1-Dynegy calls Seneca proposals disruptive

* Seneca had proposed booting Dynegy CEO off board

* Dynegy urges shareholders to reject proposal

NEW YORK, Nov 26 (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 billionaireCarl 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)

UPDATE1-Dynegy calls Seneca proposals disruptive