Gas power giant Dynegy accepts $665m. bid from Carl Icahn

By ASSOCIATED PRESS
December 15, 2010 16:46
1 minute read.

NEW YORK — Billionaire investor Carl Icahn appeared to have wrested Dynegy Inc. away from The Blackstone Group, as the Houston power plant operator on Wednesday accepted Icahn's bid to buy the company for $5.50 per share.

Icahn, who owns a 9.9 percent stake in Dynegy, had opposed Blackstone's offer of $5 per share. He bid 10 percent higher at $665 million, and Dynegy said Icahn would support even sweeter deals from other players.Calls to Blackstone and Seneca Capital, another prominent Dynegy shareholder, were not answered Wednesday morning.

Dynegy had been considering a takeover for several months as natural gas prices slumped and the company was forced to book millions of dollars in asset impairment charges. The company reported a net loss of $1.25 billion in 2009 and another $70 million loss in the first nine months of this year. Dynegy also holds $3.95 billion in debt.

With the economy on the mend, however, shareholders are looking for a rebound in energy prices and energy companies like Dynegy. They sided with Icahn, who thought Blackstone's offer was too low.

Blackstone's offer was thought to be "highly misrepresenting the future potential of power markets," said RBC Capital Markets analyst Lasan Johong.


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