Blackstone Group To Buy Dynergy With NRG Energy

Dynergy, Inc. (NYSE: DYN) is having its Neutral rating reiterated by Ladenburg Thalmann, but is having its price target lowered from $7.50 to $4.50 (excluding dividends) due to the purchasing of DYN by The Blackstone Group, LP (NYSE: BX) for $4.50 p/s in cash, an purchase totaling $4.7B.

Dynergy reported an adjusted 2Q EBITDA of $124M compared to $125M in 2Q09 and Ladenburg's estimate of $89M, while 2Q cash free cash flow totaled $168M including approximately $272M of collateral returns.

The acquisition is viewed favorably by Ladenburg because of its near-term value for shareholders despite the near trough power markets and depressed near-term cash/earnings. Ladenburg believes that Blackstone is betting on a power market recovery.

Dynegy, Inc. closed yesterday at $4.53.