Blackstone Group increases takeover bid for Dynegy to $5 a share

Asset manager Blackstone Group said Tuesday that it would increase its takeover bid for Dynegy Inc. to $5 a share in what it termed its “best and final offer” for the Houston energy company.

The move comes a day ahead of a scheduled shareholder vote on Blackstone’s previous offer to pay $4.50 a share and assume more than $4 billion in Dynegy debt to take the energy company private. Tuesday’s sweetened offer represents an 11.1% hike over the previous bid.

Dynegy has been urging shareholders to vote in favor of the takeover by Blackstone, saying it is in the best interest of shareholders. It has argued that it would face significant challenges from its weakened financial position, low prices and the weak economy without the sale.

But financier Carl Icahn, who has taken a stake in Dynegy, had argued that the Blackstone offer of $4.50 a share was too low.

Icahn didn’t immediately return a phone message seeking comment on the higher Blackstone bid.

Dynegy shares rose 39 cents, or 8.4%, to $5.02.

Dynegy owns power plants around the country and sells electricity mostly to wholesale markets in New York, California and the Midwest.