Where were Icahn and Seneca when Dynegy was looking for a buyer?

Today is D-day. D standing for Dynegy. Yes, at long last the deal that has had the power sector at the edge of its seat for months will be settled one way or the other.

Blackstone increased its bid at the last minute – Tuesday evening – to $5 a share, from $4.50 a share. That is an 11.1 per cent increase over its initial bid and valued Dynegy’s equity at about $603m.

Not bad for a company that has been in a perpetual state of restructuring since the Enron era, when energy companies up and down Houston’s Louisiana Street found themselves in trouble.

Some shareholders seemed to think so too; Dynegy’s share price closed Tuesday at $5.02, 82 per cent above the 52 week low of $2.76 set on August 12 – the day before the deal was announced. But whether that will be enough to win it for Blackstone remains to be seen.

The shareholders who have been waging a campaign against the bid - Carl Icahn and Seneca Capital, who subsequently bought a combined 22 per cent of Dynegy – continue to complain that the price is too low.

But if Dynegy had so much value, how come nobody wanted it before the Blackstone deal was announced or even after?

Bruce Williamson, Dynegy’s chief executive, has been shopping for a buyer for years now. He met with 16 potential suitors before the Blackstone deal was announced and some 40 afterward. Nobody but Blackstone has actually put in a bid.

Shareholders can take a sure thing – a deep pocket investor who can wait out the drop in natural gas prices that is putting pressure on Dynegy. Or they can reject Blackstone and hope Mr Icahn and or Seneca can work their own magic.

What troubles me is that if either of those parties believe Dynegy is such a great buy, why haven’t they put in their own bids?

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