Icahn Boosts His Dynegy Stake, Offers $2B Credit Line, To Oppose Blackstone’s Bid – Reuters

Carl Icahn increased his stake in Dynegy Inc. to 12.9 percent from about 9.95 percent and will offer a $2 billion credit to the Houston,Texas-based electricity producer, Reuters said. Icahn also plans to oppose Blackstone Group LP’s offer to acquire the Dynegy for $543 million, or $4.7 billion including debt.

(Reuters) – Billionaire investor Carl Icahn increased his stake in Dynegy Inc (DYN.N: Quote, Profile, Research, Stock Buzz) to 12.9 percent, said he will vote against Blackstone’s (BX.N: Quote, Profile, Research, Stock Buzz) proposal to buy the debt-ridden power company and will offer a $2 billion line of credit to the firm. Private equity firm Blackstone agreed to buy Dynegy in August for $543 million, or $4.7 billion including debt, but the deal must win shareholder approval at a meeting scheduled for Nov. 17. [ID:nN13179076]

Icahn’s opposition to the Blackstone deal adds to the previous objections from Dynegy stakeholder hedge fund Seneca Capital, which owns a 9.29 percent stake in Dynegy.

“The Icahn companies, which have billions of dollars of liquidity, will today contact management to make available a $2 billion line of credit if Dynegy management cannot obtain other financing,” Icahn said in a regulatory filing.

In October, Icahn, who had then built a 9.95 percent stake in Dynegy, said Blackstone’s $4.7 billion buyout of the struggling power company was too low, threatening the deal’s chances of succeeding in its current form. [ID:nSGE69B0GN] However, proxy advisory firm ISS recommended that shareholders vote for the company’s takeover by Blackstone. [ID:nN08237118] Dynegy’s shares, which have been roughly flat since Blackstone’s proposal, closed Thursday at $4.63 on the New York Stock Exchange.

(Reporting by Thyagaraju Adinarayan and Brenton Cordeiro in Bangalore; Editing by Anne Pallivathuckal)