Corporate raider Carl Icahn used to chair Imclone, act as a director of Blockbuster, and meddle in Yahoo. The man is no stranger to contentious companies, so perhaps it shouldn’t come as a surprise that Enron-embroiled Dynegy Group is his latest conquest. Icahn is planning to buy Dynegy, one of the biggest coal power producers in the US, for $665 million. From Bloomberg:
Dynegy Inc., the third-largest U.S. independent power producer, said its board has unanimously approved a $665 million offer to be acquired by Icahn Enterprises LP after the company’s shareholders rejected a lower bid from Blackstone Group LP.
Icahn Enterprises’ offer of $5.50 a share represents a 10 percent premium over Blackstone’s offer of $5 a share, Dynegy said in a statement today. The agreement also allows Dynegy to continue pursuing a better offer until January 24. Icahn has agreed not to oppose another buyer if Dynegy receives a higher bid.
Sale of the company at more than $4.50 a share within 18 months of Blackstone’s November offer will trigger a $16.3 million payment to Blackstone, according to an agreement with Dynegy.
Dynegy had an Enron-like business model in 2000; one year later, it was even on the verge of taking over the crooked E when all the accounting scandals unraveled. Dynegy did manage to nab a lucrative natural gas pipeline after Enron’s collapse, but had to sell that to Warren Buffett and a few other investors after hitting its own accounting scandal in 2002. The company skated around bankruptcy in following years, restructuring in order to focus on coal and natural gas company. Still, since 2008, Dynegy has been on a steady decline, making it ripe for private equity investment.
Carl Icahn’s fat portfolio of holdings, meanwhile, is heavier on oil than coal or natural gas. Dynegy will put the world’s 24th richest man into yet another industry–and round out the contentious-company sector of his empire.