Icahn’s $665M Dynegy bid wins antitrust consent

By Jim Polson
Bloomberg News

New York billionaire Carl C. Icahn’s $665 million bid for Dynegy Inc., the third-largest U.S. independent power producer, received U.S. antitrust approval, the Federal Trade Commission said on its website.

Icahn’s Dec. 15 offer of $5.50 a share still faces several hurdles, including approval of the Federal Energy Regulatory Commission and the opposition of Dynegy’s second-largest shareholder, Seneca Capital, which wants more money. Dynegy said it remains open to other bids until at least January 25 at midnight, when Icahn’s offer expires.

The offer may be extended, according to a Dec. 23 filing. Icahn is Dynegy’s largest holder with almost 15 percent of shares, according to that filing.

Icahn’s offer, valued at $4.73 billion including debt, came after shareholders’ rejected a $5 a share proposal in November from Blackstone Group LP. Seneca, which owns 9.3 percent of Dynegy shares, opposes the Icahn bid as too low. The hedge fund previously joined Icahn in rejecting the Blackstone bid for the same reason.

Seneca on Dec. 20 urged holders to keep their shares, saying they are worth as much as $7, and might rise as high as $18 after economic recovery revives demand for power from Dynegy’s plants. Scot Hoffman, a spokesman for Seneca, had no immediate comment on the FTC’s announcement today that Icahn’s offer was approved by antitrust authorities.

More Approvals Needed

In addition to the approval still needed from the Federal Energy Regulatory Commission, the New York Public Service Commission may intervene in the transaction, according to the Dec. 23 filing.

Dynegy owns plants in seven U.S. states with the capacity to power about 9.8 million average U.S. homes. NRG Energy Inc., based in Princeton, New Jersey, is the largest U.S. independent power producer by sales, followed by Houston-based Calpine Corp. Independent power producers don’t own the electricity lines connecting their plants with homes and businesses.

Photo: In this Oct. 11, 2007 file photo, private equity investor Carl Icahn speaks at the World Business Forum in New York. (AP/Mark Lennihan)