Dynegy Inc.’s share price inched up on Friday following news that it had settled all of the shareholder class action litigation brought against the company between June 2001 and July 2002. The settlement could pave the way for a possible sale or merger of the company, which has been rumored to be in the works for several weeks.
A U.S. district court judge finalized an agreement late Thursday resolving all of the litigation, according to company spokesman John Sousa.
“With this matter fully resolved in a fair and equitable manner for all of the parties involved, we can continue to concentrate on the future direction of the company,” Sousa said.
There have been rumors circulating for the past month that Dynegy is looking for a buyer or a merger partner, but Sousa declined to comment. CEO Bruce Williamson had commented earlier this year that Dynegy’s remaining power assets by themselves would not be a “sustainable business model” (see Daily GPI, June 17).
Dynegy has yet to finalize a midstream asset buyer, said Sousa, but “we continue to work as expeditiously as possible” on the sale.” The sale would cut Dynegy’s last tie to the natural gas business with the midstream natural gas liquids (NGL) asset and marketing network, a move that analysts say could bring in as much as $3 billion. The Houston-based company put its NGL business on the market with an announcement in May (see Daily GPI, May 10).
Following the class action settlement agreement news, Dynegy’s share price was hovering above $5/share at midday Friday. For the year, the stock has ranged between $3.20-6.09. In mid-2001, Dynegy was selling at around $43/share, and by mid-2002, the share price had fallen to around $6.60/share.
The class action settlement included claims for damages on behalf of a class of purchasers of Dynegy Class A common stock between June 2001 and July 2002. Two payments totaling $250 million will be made in 2005. An initial payment of $175 million was made, which will be followed by a second payment of $75 million. Dynegy will also issue Class A common stock in the value of $68 million with court approval.
Dynegy had settled two comprehensive shareholder lawsuits earlier this year covering about the same period for its involvement in the dubious natural gas transaction dubbed “Project Alpha” (see Daily GPI, April 18).
©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |