Icahn May Need to Extend Dynegy Bid

Includes: BX, DYN
by: Alacra Pulse Check Blog

By Sheena Lee

One of the largest independent power producers in the U.S., Dynegy (NYSE:DYN), said that it had not received any additional acquisition proposals by the Monday expiration of its “go shop” period. Carl Icahn’s $665 million offer to buy Dynegy expires on Tuesday at midnight. (DealBook)

If the Icahn offer doesn’t win support from a majority of Dynegy shareholders by the deadline, Icahn can extend the offer as far as Sept. 15. “Pressure for a higher bid could be mounting,” Andrew Smith, a New York based analyst for JP Morgan Securities, said in a note to clients yesterday affirming his “overweight” rating and a target price of $7 a share. (Bloomberg)

Under the terms of the agreement, Dynegy stockholders will receive $5.50 in cash for each outstanding share of Dynegy common stock they own, which is $0.50 per share and represents a 10% premium to Dynegy’s average closing stock price over the last 30 trading days. If Dynegy accepts Icahn’s offer, the company expects to close the purchase in the first quarter of 2011. (Zacks)

In November, the Blackstone Group (NYSE:BX) had offered Dynegy $4.50 – $5.00 a share. Seneca Capital and Icahn hold nearly 20% of Dynegy’s shares. (DealBook)