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Experts say DPL unlikely to be ready for shareholder vote in mid-July

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By John Nolan, Staff Writer Updated 4:24 PM Thursday, June 16, 2011

DAYTON — DPL Inc. has said it hopes to convene its shareholders in mid-July to vote on whether to approve a merger with energy giant AES Corp., but DPL will be challenged to make the meeting happen then since the company hasn’t yet filed a preliminary proxy statement with the U.S. Securities and Exchange Commission, outside experts said Thursday.

“It’s probably highly unlikely that they could get everything resolved in time to have the meeting in mid-July,” said Harry Gerla, a University of Dayton law professor who is a former staff lawyer with the SEC.

“Public utilities are a highly regulated industry, which tends to make the whole deal process move more sluggishly,” said Price Pritchett, a Dallas consultant on mergers who has advised energy companies and others involved in corporate unions.

The preliminary proxy statement is subject to examination and questions by SEC staff before DPL is cleared to mail final versions of the proxy to shareholders for their review. DPL management intends to use the proxy to make its case that DPL shareholders should approve the $3.5 billion merger when they come together in Dayton for their annual meeting, postponed from April 27.

Paul Barbas, DPL’s president and chief executive officer, said in April when he announced the merger plan that he hoped to convene the shareholders in mid-July for a vote, but the meeting hasn’t been scheduled. DPL hopes to soon file its preliminary proxy with the SEC, company spokeswoman Lesley Sprigg said Thursday.

“The SEC approval process is at a minimum 10 days, but will more likely be 30 to 40 days following the filing of the preliminary proxy,” Sprigg wrote in an email response to the Dayton Daily News. “Our annual meeting date is contingent on completion of the SEC approval process.”

In May, DPL and AES requested state approval of the proposed $3.5 billion merger, which would make DPL a wholly owned subsidiary of AES. The Public Utilities Commission of Ohio has six months within which to approve or reject the deal. AES, an international energy company based in Arlington, Va., proposed in April to pay $30 in cash for each common share of DPL stock and would assume $1.2 billion of debt from DPL.

DPL said Wednesday that it cleared a potential federal regulatory hurdle. Antitrust regulators at the Justice Department and Federal Trade Commission ended a waiting period during which they could have requested additional information for deciding whether the proposed merger would violate laws that forbid market monopolies, DPL said.

Some shareholders have filed lawsuits, alleging that DPL’s board of directors failed to obtain an adequate sale price for DPL and that board members and senior executives would enrich themselves at the expense of shareholders. DPL has declined comment on the lawsuits.

Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.

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