Many similarities between ABWTQ and DYN
imo, it will not be long before investigations into lumber trading will hit the fan, along with other soft commodities (reverse hedges tied to Credit Default Swaps).
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Seems Karl Miller was correct. Natural Gas has been manipulated downward by hedge funds. DYN management story is not holding together.
US Regulator Subpoenas Natural Gas Traders
CNBC.com | November 02, 2010 | 04:57 PM EDT
The Commodity Futures Trading Commission sent subpoenas to several natural gas traders last month amid an investigation into energy futures trading activity in 2008 and 2009, according to media reports.
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Blackstone's motives for ABWTQ are likely the same.
By Shira Ovide
Has a $542 million deal ever been this fraught?
In another twist in Dynegy’s troubled efforts to clinch a sale to Blackstone Group, an angry hedge fund is trying to kick the Dynegy CEO and one other director off the company’s board, reports Deal Journal colleague Gina Chon.
Bloomberg NewsSeneca Capital for weeks has been firing off missives slamming Dynegy’s proposed sale, which the hedge fund says is underpriced and ill-advised. Dynegy hasn’t been shy about firing back, by dropping hints Seneca has secret motives to profit from a dumped deal.
Finally, though, Seneca has stopped relying on just its poisoned pen. Seneca, which says it owns about a 12% economic interest in Dynegy, nominated two of its own directors to the company’s board. Seneca also bragged that its director nominees have acquired more Dynegy shares than all the company’s non-executive directors put together. Seneca said it may put up even more director nominees.
It is Seneca’s opinion that those members of the Board who have endorsed management’s scorched-earth approach in defending the sale of the company at $4.50 per share ($0.90 per share adjusted for reverse split) and that endorsed the buyback of 30% of Dynegy in August 2009 at $9.65 per share will likely step down from their positions once the Merger proposal is defeated.
Of course, Seneca still hasn’t said whether it has a Plan B for Dynegy if shareholders turn down the Blackstone deal. In part, Seneca has said as soon as electricity prices rebound, Dynegy will be much closer to ship-shape. Dynegy, by contrast, keeps saying the company will be out on a ledge 30 stories in the air without the Blackstone deal. Not surprisingly, Dynegy doesn’t support the Seneca board nominees:
Dynegy’s Board of Directors is comprised of experienced, dedicated and independent directors, each of whom understands the real near- and medium-term challenges facing Dynegy that cannot be addressed with ambiguous suggestions and potentialities like those put forth by Seneca. Seneca’s last minute proposal to nominate two directors is a desperate attempt to derail the Blackstone transaction based on hopes and assumptions about future energy prices, the timing of the implementation of Clean Air regulations, and other factors that neither Dynegy nor Seneca control.
Next stop: A deal vote by Dynegy shareholders on Wednesday. Stay tuned
