Dynegy Inc. Investor Alert – Board Under Investigation

Only hours Dynegy Inc announced its takeover by an affiliate of The Blackstone Group an investigation on behalf of investors of Dynegy Inc. (NYSE:DYN) was announced.

Dynegy Inc, located in Houston, Texas, is a holding company and conducts the business operations through its subsidiaries. On Friday, August 13, 2010, Dynegy Inc. (NYSE:DYN) announced that it has entered into a merger agreement pursuant to which it will be acquired by an affiliate of The Blackstone Group L.P. (NYSE:BX) in a transaction valued at approximately $4.7 billion, including the assumption of existing debt. Whiles Dynegy Inc. reported over the years substantial revenue like $1.77billion in 2006, $2.918billion in 2007, $3.324billion in 2008, and $2.468billion in 2009, Dynegy’s Net Income went from $264million in 2007, to $174million in 2008, and a Net Loss of $1.247billion in 2009. Under the terms of the merger agreement, Dynegy stockholders will receive $4.50 in cash for each outstanding share of Dynegy common stock they own. According to Dynegy its Board of Directors has approved the merger agreement and the offer represents a 62 percent premium to the closing share price on August 12, 2010.

Shares of Dynegy Inc. (DYN) traded days before the news at roughly $3 per share and jumped in response to the news to $4.43 per share. But DYN shares traded as early as June 25, 2010 above the current offer at $4.65per share. DYN shares traded after the split on May 24, 2010 as high as $5.23 per share on May 28, 2010 and at least one analyst set a price target for Dynergy stock at $7.50 per share.. Before the May split DYN shares traded in the past 6months as high as $8.35 per share, and reached a 52weekhigh of $13.35 per share. DYN shares traded during 2008 as high as $47.10 per share, and during 2007 as high as $52.50 per share.

The investigation by a law firm “concerns whether The Blackstone Group L.P., as well as the directors of Dynegy Inc. breached their fiduciary duties by not acting in Dynegy Inc. (NYSE:DYN) shareholders' best interests in connection with the sale process of Dynegy Inc. , whether the Dynegy Board of Directors breached their fiduciary duty to Dynegy stockholders by failing to adequately shop the Company prior to entering into the agreement, whether the Board of Directors breach their fiduciary duties by not seeking a deal that will provide better value for Dynegy Inc. (NYSE:DYN), and whether the affiliate of The Blackstone Group L.P. is underpaying for Dynegy Inc. (DYN), thus unlawfully harming DYN stockholders.”