Power producer Dynegy Inc. said on Tuesday it plans to end its agreement to sell itself to Blackstone Group because it does not have shareholder support, and it will seek other buyers.
The private equity firm's proposed takeover of Dynegy had hung in the balance since last Wednesday, when Dynegy recessed a shareholder meeting to vote on Blackstone's offer.
Dynegy shares fell slightly after it said it would contact potential buyers, including its two largest shareholders, hedge fund Seneca Capital and billionaire Carl Icahn's Icahn Associates.
Seneca and Icahn Associated had fiercely opposed the Blackstone proposal because they thought it was too low, even after Blackstone raised its bid last Tuesday 11 percent to $602 million, to try to get enough support for the deal.
The power producer's shareholder meeting is due to restart Tuesday afternoon, the company said.
Dynegy said a special committee of its independent directors, chaired by lead independent director Patricia Hammick, will oversee what it calls its strategic alternatives process.
The company added it would engage with Seneca Capital regarding the appointment of an independent candidate to its board, which currently has six members, including five independent members.
Separately, Dynegy also adopted a shareholders rights plan.
Goldman, Sachs & Co. and Greenhill & Co. LLC will serve as financial advisers for the open strategic alternatives process. Sullivan & Cromwell LLP is serving as legal counsel.
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