Standard & Poor’s lowered its rating on Dynegy to “sell” from “hold” after the energy company and Blackstone Group announced they would abandon their merger agreement ahead of a shareholder meeting where the proposal was expected to fail. “We think the absence of buyers during a 40-day shopping period under the prior deal is indicative of market interest,” wrote S&P Utilities analyst Christopher Muir in a note. Muir cut his target price to $4.50 (£2.85) on the idea that there is some remaining takeover appeal.
In a statement, Blackstone said it was disappointed by opposition from Seneca Capital and the activist investor Carl Icahn to its final proposal of $5 a share. Blackstone originally offered to acquire Dynegy for $4.50 per share. Dynegy shares yesterday fell 17 cents, or 3.3 per cent, to $4.97.