Billionaire investor Carl Icahn has agreed to buy the third-largest U.S. independent power producer Dynegy (DYN) for $665 million in cash. The deal comes just three weeks after a bid for $603 million, or $5/ share, by PE firm Blackstone Group (BX) failed to win over Dynegy shareholders.
Mr. Icahn, a Dynegy stockholder who owns nearly 10% of Dynegy’s outstanding shares and holds options to buy another 5%, said in press release that “All stockholders should benefit from the auction process which has now begun at a price which is 10% higher than the last bid.”
Under the terms of the agreement, set to expire on Dec. 22, Dynegy stockholders will receive $5.50 per share by Icahn Enterprises (IEP) in cash for each outstanding share of Dynegy common stock they own. The bid, which is $0.50/share or 10% higher than Blackstone’s offer, calls for Dynegy to seek out any “superior proposals ” until January 24, 2011.
Bruce A. Williamson, Chairman, President and CEO of Dynegy Inc. who had extensively sought better offers before the Blackstone deal was announced, said, “We believe the IEP offer, coupled with our continued ability to solicit superior proposals and the commitment of IEP to support a company accepted all cash offer for 100% of the Company, is a very positive outcome for all Dynegy stockholders.”
Dynegy, who owns about 12,100 megawatts of power production capacity on the East Coast, Illinois and the West Coast, has about $3.95 billion of outstanding debt, net of cash.
At last check, DYN shares were up $0.16 to $5.61, a gain of 2.94%. Volume of 37 million shares is already more than 6x the daily average volume of 6.9 million shares.
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