On Friday 13th August, 2010 the asset manager of Blackstone Group said “Blackstone Group is paying $542.7 million to take over Dynegy Incorporation private in a three-way deal that will see Dynegy also put up for sale four power plants to NRG Energy Incorporation”.
A spokesperson for Dynegy Incorporation, which owns power plants around the country and sells electricity mostly to wholesale markets in New York, the Midwest and California, said “our shareholders will receive $4.50 per share in cash for our almost 120.6 million shares outstanding, representing a 62 % premium to the stock’s closing price on Thursday”.
Dynegy has struggled as energy prices fell during the recession. As per its available data, last year Dynegy sold 8plants and another under development project, which was a representative of about a quarter of its generation, for $1.5 billion in cash and stock to L.S. Power and used the proceeds to pay down debt.
However after the news of deal between Dynegy and Blackstone Group, share price of Dynegy Incorporation jumped $1.75 i.e. nearly 63 % to close at $4.53 Friday, but, Blackstone’s shares fell down from 38 cents to $10.63 i.e. 3.55 almost.
Bruce A. Williamson, Dynegy president, chairman and current CEO, said “Dynegy’s board of directors believes that the planned transaction with Blackstone provides our stockholders with a significant premium over the current stock price and will also help to remove the risks to the existing stockholders associated with volatile commodity prices, challenging capital markets and environmental and regulatory uncertainties”.
Dynegy is expecting to hold a special stockholder meeting on the Blackstone deal in the fourth quarter of this year, with the acquisition also expected to close by the same quarter.
Dynegy
