Dynegy CEO, directors are out as Icahn bid is rejected

Power producer Dynegy Inc. will replace its chief executive and all its board after shareholders rejected Icahn Enterprises’ $665-million offer.

Bruce Williamson, 51, has resigned as chairman and will step down as CEO effective March 11, Dynegy said in a statement. Patricia A. Hammick, 64, who headed a board of independent directors reviewing the Icahn bid, will become chairwoman, the company said. Board member David Biegler, 64, will become interim CEO. Chief Financial Officer Holli Nichols, 40, also will resign as of March 11.

Dynegy, based in Houston, said none of its five remaining directors would stand for reelection at the company’s annual meeting planned for June. Dynegy’s board offered Icahn and Seneca Capital, its two largest shareholders, one appointment each to the new board of directors, who would then select candidates for the rest of the slots.

The moves recognize “the desire of the stockholders to pursue a different path,” Dynegy said in its statement.

Icahn’s $5.50-a-share-bid, valuing Dynegy at $4.73 billion including debt, was the second takeover spurned by shareholders since November, when Blackstone Group failed to win sufficient support for a bid of $5 a share. The Dynegy board supported both offers, urging shareholders to sell or risk a plunge in the share price.

Dynegy shares fell 12 cents, or 2%, to $5.89 on Tuesday.

Separately, Icahn offered to buy the remaining shares of software maker Mentor Graphics Corp. for $17 a share in cash, valuing the company at about $1.9 billion, according to a regulatory filing Tuesday.

Mentor, based in Wilsonville, Ore., makes software and systems used to test electronics components used in aerospace and military-grade products, automobiles and low-power electronics.