SDG&E; Director Resigns to Protest Merger Vote
Charles (Red) Scott, chairman of La Jolla-based Intermark, resigned Thursday as a director of San Diego Gas & Electric to protest Wednesday’s vote to merge SDG&E; into SCEcorp’s Southern California Edison subsidiary.
Scott voted against the merger “because I do not believe that selling out today for a premium is in the best interest of SDG&E; or its shareholders,” according to a statement released Thursday by his attorneys.
As proposed, the merger would create the nation’s largest electric utility with 4.8 million customers. The merger now must be approved by SDG&E; and SCEcorp shareholders, as well as various state and federal regulators.
Scott, a 60-year-old businessman who joined SDG&E;'s board in 1983, disagreed with legal advisers who suggested that directors “had no choice but to approve the Edison offer and that any other decision would result in personal liability to the directors.”
“I cannot believe that any court in the land would impose liability on a completely independent director who acted on behalf of his company and its shareholders on this basis,” Scott said.
SDG&E; hired Skadden, Arps, Slate, Meagher & Flom, a major New York-based corporate law firm, to advise directors and officers on legal issues surrounding the proposed merger.
SDG&E; Chairman Thomas Page said he had not expected the resignation and that Scott’s statement represented “the personal views of one director and it is not appropriate to discuss the deliberations of the board.” Eight board members remain.
Page maintained that the board’s options were somewhat restricted because “this all started out and still is a hostile acquisition.” To that end, SDG&E;'s board determined that the SCEcorp offer was “fair, compelling, adequate or whatever,” Page said.