Just hours after its tender offer of $5.50/share, or $665 million in aggregate, for Dynegy Inc., was due to expire, Icahn Enterprises subsidiary IEH Merger Sub LLC extended the deadline until 5 p.m. EST Monday “to allow additional time for FERC approval,” the company said.
“The tender offer is being extended because certain conditions to the tender offer have not been satisfied as of the previously scheduled expiration date, including receipt of the approval of the Federal Energy Regulatory Commission [FERC] under Section 203 of the Federal Power Act, as amended,” according to IEH.
Approximately 5.4 million shares (4.41%) of Dynegy’s common stock had been tendered by 5 p.m. EST Wednesday, the previous deadline for the tender offer, IEH said. The offer had initially been scheduled to expire Jan. 25 but was extended two weeks by IEH.
Seneca Capital, one of the company’s biggest shareholders, has urged Dynegy shareholders to reject the Icahn firm’s $5.50 offer and preemptively rejected an offer for $6/share, should IEH increase its offer (see Daily GPI, Feb. 10). Seneca renewed its request to the Dynegy board “for an immediate waiver to its poison pill to permit Seneca Capital to work in concert with others for the purpose of acquiring additional Dynegy common stock, including potentially IEH’s affiliated ownership position, at a price greater than $5.50 per share.” Dynegy rejected a similar request from Seneca last month.
Last year Dynegy shareholders rejected a $5/share offer by a unit of the Blackstone Group LP (see Power Market Today, Nov. 24, 2010). Dynegy announced Dec. 16 that its board approved an offer to be acquired by Icahn’s company that was 10% higher than the one from Blackstone (see Power Market Today, Dec. 16, 2010).
Dynegy has said it faces $1.6 billion in negative free cash flow during the next five years (see Daily GPI, Nov. 17, 2010).
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