Wednesday, October 13, 2010

Dynegy (NYSE:DYN) Worth More Than Blackstone Offer Says Icahn

Activist billionaire investor Carl Icahn bought up shares of Dynegy (NYSE:DYN) near the end of September, paying $4.73 to $4.87 a share for the company, significantly more than the $4.50 a share bid made by Blackstone for Dynegy. That equals about a 9.5 percent stake in the company.

Seneca Capital LP also recently acquired a 9.3 percent stake in Dynegy, suggesting they're going to push Blackstone for a higher price, even though they said the $4.50 bid is their final offer.

Trading below $3 a share and expected to go lower before the Blackstone bid, it would be interesting if they hold to their final offer numbers to see if Icahn and Seneca blink.

With nothing in the market to suggest there will be a turnaround anytime soon for Dynegy, the investors would have to hold them for a long time if Blackstone backs out before they get a positive return.

If the deal does fall through, it is thought Dynegy will fall to levels even lower than before the bid.

Dynegy closed Tuesday at $4.87, gaining $0.12, or 2.53 percent.

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