The deal represents a reprieve for stockholders of Dynegy, whose shares have been sliding for several years as the company has struggled with sluggish demand.
Excluding debt, Blackstone is offering $543 million in cash, or $4.50 for every Dynegy share, a 62 per cent premium over closing price on Thursday.
Blackstone also plans to sell four Dynegy natural gas plants to NRG Energy for $1.36 billion, a sale contingent on the completion of the leveraged buyout.
In acquiring Dynegy, Blackstone is counting on power prices rising from their cyclical lows, positioning the sector for a rebound, according to a source.
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