Dynegy Shareholders Reject Blackstone Offer, Dynegy Investigating Asset Sales, Other Options

Dynegy shareholders rejected a $605 million bid from The Blackstone Group to acquire the independent power producer, which also stops NRG Energy's planned acquisition, at least as originally envisioned, of what would have been several of the newly acquired plants from Blackstone.

Dynegy has opened a new strategic revenue process to review individual asset sales, debt restructuring, and cost cutting opportunities, in addition to soliciting further interest in a sale of the entire company. Dynegy's financial advisors will contact a broad group of potential strategic and financial buyers, including Seneca Capital and Icahn Associates, two of Dynegy's largest shareholders who had opposed the Blackstone transaction as under-valuing the company.

NRG had agreed in August to purchase from Blackstone, upon consummation of its takeover of Dynegy, 3,884 MW of mostly gas-fired plants for $1.36 billion, or $351/kilowatt. Earlier this month, NRG said that it would not be willing to pay the same amount for these assets given the decline in natural gas prices.

The assets, located in California and Maine, which NRG had been seeking to purchase were:

Casco Bay 540 MW Combined Cycle Natural Gas

Moss Landing (1&2) 1,020 MW Combined Cycle Natural Gas

Moss Landing (6&7) 1,509 MW Steam Turbine Natural Gas

Morro Bay 650 MW Steam Turbine Natural Gas

Oakland 165 MW Combustion Turbine Oil