Dynegy received no competing bids for Icahn offer

NEW YORK (Reuters) - Power producer Dynegy Inc (DYN.N) said nobody stepped forward to top Carl Icahn's $665 million takeover offer, clearing the way for the company to move forward with the billionaire investor's bid.

Dynegy said on Tuesday that its advisers Goldman Sachs and Greenhill & Co contacted over 50 parties to determine whether they would be interested in a deal during a so-called "go shop" period that expired on Monday night.

While the Houston-based company said it did work with several of these parties, it did not receive any bona fide acquisition proposals during the period.

Dynegy shares were down 3 cents at $5.85 in afternoon trading on Tuesday. But they are trading more than 6 percent above the value of Icahn's $5.50 a share cash bid, indicating that some shareholders are still hoping for a higher bid.

Dynegy's board has unanimously backed Icahn's offer. The tender offer is scheduled to expire at midnight on Tuesday, but the parties have agreed to extend the offer if conditions for its closing have not been met.

Icahn's bid for the company follows a failed effort to sell Dynegy to private equity firm Blackstone Group. (BX.N) That deal -- which would have paid $5 for each Dynegy share -- was voted down after stiff resistance by the company's two largest shareholders, Icahn and hedge fund Seneca Capital.

Seneca, which owns 9.3 percent of Dynegy's shares, has argued that the current bid is far too low and has launched an effort to have Dynegy CEO Bruce Williamson and another director removed from the company's board.

Seneca has said it believes Dynegy is currently worth $7.50 to $8.50 a share and $18 to $20 a share in the future.

Dynegy has struggled amid soft power prices and high debt, which stands at about $3.95 billion, and has long been considered a merger candidate.

Blackstone's original $4.50 a share bid came as the company's shares hovered near their lowest level since 2002, but its raised $5-a-share offer was still soundly rejected by Dynegy shareholders.

The company owns about 12,100 megawatts of power capacity on the East Coast, Illinois and the West Coast.

The company said last week the New York Public Service Commission has given its nod for the deal.

(Additional reporting by Krishna N Das in Bangalore; Editing by Sriraj Kalluvila, Dave Zimmerman)