Dynegy shareholders reject $4.7bn Blackstone bid

Blackstone could receive up to $26m in fees from Dynegy after the company's shareholders rejected the firm's bid this week.

Shareholders of energy giant Dynegy have rejected a $5 per share buyout offer from The Blackstone Group, according to a preliminary vote count, and the firm has dropped its bid.

The company expects to continue looking for buyers, Dynegy said. As part of the new sales process, the company will talk to hedge fund Seneca Capital and financier Carl Icahn. Seneca is expected to make an offer for Dynegy at $6 per share, according to media reports.

Blackstone, in a statement Tuesday, said Seneca Capital and Icahn opposed the firm’s offer.

“We appreciate the efforts made by Dynegy to communicate the merits of our offer,” David Foley, a senior managing director with Blackstone, said in a statement.

Dynegy will pay the firm about $10 million for expenses as part of the deal, and may have to pay a $16 million break-up fee if the company accepts an offer from another bidder greater than $4.50 per share, which was Blackstone's initial offer, within 18 months.

Blackstone’s initial offer for Dynegy would have totaled $4.7 billion with the inclusion of debt. Blackstone planned to put about $543 million of cash into the transaction.

The Blackstone deal had been contingent on another company, NRG Energy, buying four natural gas-fired assets owned by Dynegy for $1.36 billion. NRG Energy will not be acquiring the assets at this point, the company said in a statement.