The lawsuits, which seek to represent all holders of DPL common stock, allege that DPL’s board of directors failed in its duty to get the best possible price for sale of the company, and that the board sought to enrich itself at the expense of shareholders. DPL has said the lawsuits have no merit, and that it wants to have them resolved in order to go forward with the merger, which the company said its board and senior executives have unanimously endorsed.
The settlement agreements do not involve seven lawsuits filed challenging the merger in state court, the Montgomery County Common Pleas Court in Dayton, where the litigation awaits assignment to a judge and possible consolidation into one lawsuit that could represent common claims by investors, Art Meyer, DPL senior vice president and general counsel, said Monday.
DPL doesn’t know how much it will have to pay for attorneys’ fees and expenses in order to settle the lawsuits, Meyer said.
As part of the proposed settlements, DPL said it would provide information about cash flow estimates used in management’s financial projections for the merger transaction and in an analysis prepared by DPL’s financial adviser. That information will be included in proxy statements to be mailed to shareholders prior to the Sept. 23 annual meeting at which they are to vote on whether to approve the merger with AES, DPL said.
Under the merger deal announced on April 20, AES agreed to pay holders of DPL common shares $30 per share in cash, which is approximately the price DPL’s shares have been trading at on the New York Stock Exchange since the deal was disclosed. DPL shareholders will not receive shares in AES. DPL shareholders have complained that the merger’s terms will subject them to capital gains taxes on the shares sold and that it will end the quarterly stock dividends they were accustomed to receiving from DPL.
The merger makes no provision for holders of Dayton Power & Light preferred shares. Glenn Harder, DPL’s board chairman, has said the company will continue to meet all legal obligations, including paying dividends that would be owed on preferred stock.
Under the merger’s terms, 11 top executives of DPL would receive a combined $41.9 million in payouts if the deal is approved and they leave DPL as a result. DPL directors and top executives also stand to collect at least a combined $19.4 million for their stock at AES’ $30 per share offer.
The merger will not affect DP&L’s electricity rates, which are locked in through the end of 2012.
The annual meeting of shareholders is scheduled at 10 a.m. on Sept. 23 at the Mandalay Banquet Center in Moraine.
If approved, the merger would make DPL a subsidiary of AES, ending Dayton Power’s century of existence as an independent company. AES, a much larger company with energy generation and distribution operations in 28 countries, is based in Arlington, Va. It also owns Indianapolis Power and Light Co.
Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
Contact this reporter at (937) 225-2242 or jnolan@DaytonDailyNews.com.
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