DFAN14A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Securities Exchange Act of 1934

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x Soliciting Material Pursuant to § 240.14a-12

Dynegy Inc.

 

(Name of Registrant as Specified in its Charter)

Seneca Capital International Master Fund, L.P.

Seneca Capital, L.P.

Seneca Capital Investments, L.P.

Seneca Capital Investments, LLC

Seneca Capital International GP, LLC

Seneca Capital Advisors, LLC

Douglas A. Hirsch

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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FOR IMMEDIATE RELEASE

SAVING DYNEGY: FROM DISENFRANCHISING SHAREHOLDERS

NEW YORK, November 17 – Seneca Capital, one of the largest holders of Dynegy Inc. (NYSE: DYN) equity with a 12% economic interest (including 9.3% voting common stock), is writing to inform shareholders that Seneca believes the Board’s decision to “recess” the meeting is a blatant effort to thwart the will of shareholders and to disenfranchise shareholders from their votes.

 

  •  

Seneca’s advisors are confident based on voting data that shareholders would have handily DEFEATED both the proposed merger for $5.00 per share and the motion to adjourn the meeting had the votes been tallied.

 

  •  

Recessing the meeting to November 23rd with the possibility of further adjournment potentially grants an undefined extension to the purchaser without ANY compensation for shareholders.

After management’s scorched-earth campaign to scare shareholders regarding a potential liquidity crisis and a post-deal stock price free-fall, Seneca believes the increase in the proposed merger consideration further undermines management’s remaining credibility.

 

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The misalignment between management and shareholders could not be more clear.

 

  •  

Management receives 90% of its $38 million change of control compensation regardless of the stock price and the Board owns only 160,000 shares (less than 16,000 of these shares purchased outright).

Seneca believes the Board’s decision to give NEW break-up fees to the purchaser in the face of the shareholder vote against the proposed merger is a violation of fiduciary duty.

 

  •  

The NEW post-vote 3% ($16.3 million) break fee for an additional 18 months at a threshold (of $4.50 per share) below the merger price is virtually unprecedented.

 

  •  

This new obstacle to full and fair value is unfortunately consistent with previous barriers erected during the go-shop process — NRG exclusivity, matching rights and onerous CAs.

Seneca has proposed two new highly-respected director candidates in pioneering railroad executive, Hunter Harrison and successful power industry veteran, Jeff Hunter, who believe in good governance and alignment with shareholders.

 

  •  

Mr. Harrison and Mr. Hunter have committed to own in the aggregate 800,000 shares of stock personally during their tenure on the Board and Mr. Harrison has already purchased 500,000 shares.

 

Seneca urges shareholders to maintain their votes AGAINST the merger and AGAINST ADJOURNMENT as Seneca believes Dynegy is worth more than $6 per share today rising to $16-$18 per share in a recovery. Voting against an adjournment prevents the Board from extending the meeting beyond November 23rd in an attempt to further disenfranchise shareholders. Seneca believes $5.00 per share is the WRONG PRICE at the WRONG TIME for the WRONG REASONS and that shareholders should not be robbed of their right to be heard.

Contact:

for Seneca Capital

Lisa Wolford, Robinson Lerer & Montgomery, 646-805-2014

 

 

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Seneca Capital International Master Fund, L.P., Seneca Capital, L.P., Seneca Capital Investments, L.P., Seneca Capital Investments, LLC, Seneca Capital International GP, LLC, Seneca Capital Advisors, LLC and Douglas A. Hirsch (together with each of the foregoing, “Seneca Capital”) have jointly made a preliminary filing with the Securities and Exchange Commission (“SEC”) of a proxy statement and an accompanying proxy card to be used to solicit votes in connection with the solicitation of proxies against a proposed acquisition of Dynegy Inc. (“Dynegy”) by Denali Parent Inc. and Denali Merger Sub Inc., which will be voted on at a meeting of Dynegy’s stockholders.

SENECA CAPITAL ADVISES ALL STOCKHOLDERS OF DYNEGY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR, GEORGESON, INC., BY CALLING (888) 877-5373.

Each of Seneca Capital International Master Fund, L.P., Seneca Capital, L.P., Seneca Capital Investments, L.P., Seneca Capital Investments, LLC, Seneca Capital International GP, LLC, Seneca Capital Advisors, LLC and Douglas A. Hirsch (the “Participants”) is a participant in this solicitation. Douglas A. Hirsch is the managing member of each of Seneca Capital Investments,

LLC, Seneca Capital International GP, LLC and Seneca Capital Advisors, LLC. The principal occupation of Mr. Hirsch is investment management. Seneca Capital Investments, LLC is the general partner of Seneca Capital Investments, L.P. Seneca Capital International GP, LLC is the general partner of Seneca Capital International Master Fund, L.P., and Seneca Capital Advisors, LLC is the general partner of Seneca Capital, L.P. The principal business address of Mr. Hirsch, Seneca Capital Investments, LLC, Seneca Capital Investments, L.P., Seneca Capital International GP, LLC, Seneca Capital International Master Fund, L.P., Seneca Capital Advisors, LLC and Seneca Capital, L.P. is c/o Seneca Capital Investments, LP, 590 Madison Avenue, 28th Floor, New York, New York 10022.

As of November 16, 2010, Seneca Capital International Master Fund, L.P. beneficially owned 7,712,100 shares of Dynegy’s common stock, par value $0.01 per share (“Shares”), representing beneficial ownership of approximately 6.4% of the Shares. As of November 16, 2010, Seneca Capital, L.P. beneficially owned 3,514,400 Shares, representing beneficial ownership of approximately 2.9% of the Shares. Each of Seneca Capital Investments, L.P., Seneca Capital Investments, LLC, and Mr. Hirsch may be deemed to beneficially own 11,226,500 Shares, representing beneficial ownership of approximately 9.3% of the Shares, held in the aggregate by Seneca Capital International Master Fund, L.P. and Seneca Capital, L.P. Seneca Capital International GP, LLC may be deemed to beneficially own 7,712,100 Shares, representing beneficial ownership of approximately 6.4% of the Shares, held by Seneca Capital International Master Fund, L.P. Seneca Capital Advisors, LLC may be deemed to beneficially own 3,514,400 Shares, representing beneficial ownership of approximately 2.9% of the Shares, held by Seneca Capital, L.P. Each of Seneca Capital Investments, L.P., Seneca Capital Investments, LLC, Seneca Capital International GP, LLC, Seneca Capital Advisors, LLC and Douglas A. Hirsch disclaims beneficial ownership of the Shares except to the extent of its or his pecuniary interest therein, and this filing shall not be deemed an admission of beneficial ownership of such Shares for any purpose.

As of November 16, 2010, Seneca Capital International Master Fund, L.P. and Seneca Capital, L.P. held European-style call options, providing the right to purchase 1,986,900 and 904,100 shares, respectively, at an exercise price of $0.01 per share by delivery of notice of exercise as of April 15, 2011.