* CEO, CFO to resign
* Icahn Enterprises LP pact terminated
* Biegler appointed interim president and CEO
(Adds details on board positions, poison pill)
By Michael Erman
NEW YORK, Feb 21 Dynegy Inc's (DYN.N) top
management announced their resignations on Sunday after
failing to sell the company for the second time in a year.
The power company terminated its $665 million deal to sell
itself to Carl Icahn because the billionaire investor was
unable to convince shareholders to agree to the $5.50-a-share
cash bid on the table. Dynegy shares closed on Friday at $6.01
-- 9.3 percent above Icahn's bid.
Bruce Williamson will resign as president and CEO,
effective March 11. Williamson has also resigned as a director
and chairman of the board, effective immediately.
David Biegler, currently an independent Dynegy director,
has been appointed interim president and CEO. Patricia
Hammick, previously lead director of Dynegy, now serves as
chairman, the company said.
CFO Holli Nichols also plans to resign on March 11,
according to the company. Charles Cook, Dynegy's Executive
Vice President in charge of commercial operations and market
analytics, will serve as interim CFO.
The company said its current board of directors does not
plan to stand for reelection at its next annual meeting, which
is anticipated to be held in June.
Icahn's bid came under fire from hedge fund Seneca
Capital, Dynegy's second-largest shareholder, which believes
the company has more value.
Dynegy said an insufficient number of shares were tendered
in the Icahn offer, but it did not elaborate. Icahn had said he
would walk away from the deal if he was unable to convince 35
percent of Dynegy's shareholders to tender their shares 5 p.m.
Eastern Time (2200 GMT) on Friday, Feb 18.
Icahn -- the power company's largest shareholder -- and
Dynegy reached their deal in December. But Seneca remained
opposed to the sale, arguing that Dynegy's management has
consistently undervalued the company, which the hedge fund
believes is currently worth $7.50 to $8.50 a share.
Seneca could not be immediately reached for comment on
Dynegy said its board has met with and offered a director
seat to a Seneca nominee, and has also contacted Icahn
Associates to discuss appointing an Icahn designee to the
Dynegy said the board's nominating committee is expected to
consist of new directors. It will begin identifying qualified
director nominees to be appointed as soon as possible to stand
for election at the annual meeting.
"The board is positioning Dynegy for a new management and
board structure as soon as prudent. We are open to stockholder
suggestions as to additional independent directors," Hammick
said in a statement. "We expect the new members of the board to
take the lead ... selecting a new chief executive officer."
Dynegy had already had one attempt to sell itself
scuttled. Investors voted down a deal the company had reached
with private equity firm Blackstone Group (BX.N) in November,
with Icahn and Seneca teaming up to oppose the offer.
In that deal, Blackstone originally offered Dynegy
shareholders $4.50 a share and bumped its bid up to $5 a share
at the last minute.
Dynegy's management -- and Williamson in particular --
have been under fire from Seneca since the Blackstone deal was
launched. The hedge fund was already working to have him as
well as another director replaced on the company's board, and
has asked that all of the company's senior management be
Dynegy, which sells power at competitive rates into the
open market, has tried to sell itself in the face of weak
natural gas prices, which often dictate power prices.
Natural gas oversupply -- driven by new production from
U.S. shale formations -- has driven down the value of the fuel
and is expected by many to keep prices low for years to come.
Dynegy has argued that it faces serious risks if it
remains a stand-alone company, saying that weak market
conditions could force the power company into a liquidity
crisis if the deal was not completed.
"Given Dynegy's cash flow position, we believe there are
serious questions as to whether Dynegy will have sufficient
liquidity available to reach eventual market recovery," a
special committee of Dynegy's board of directors said in a
letter to investors earlier this month.
Icahn Enterprises LP IEP.N has said that if he is not
successful in closing the deal, Icahn Enterprises may seek to
discuss with Dynegy the potential for debt or equity
Dynegy also said it amended the stockholder rights plan, or
so-called "poison pill," to increase the trigger to 20 percent
from 10 percent. The rights plan will expire unless approved by
Dynegy stockholders at the next annual meeting.
(Reporting by Michael Erman, additional reporting by Jessica
Hall; Editing by Jan Paschal)
(For more M&A news and our DealZone blog, go to