(Dynegy, Allis-Chalmers story, updated for RRI Energy, Mirant gains)
NEW YORK ( TheStreet) -- Two big energy market deals on Friday morning caused huge spikes in shares of Dynegy (DYN - Get Report) and Allis-Chalmers (ALY). Both companies are being taken out -- by way of private equity purchase, in the case of Dynegy, and an acquisition, in the case of Allis Chalmers.
The $4.50 per share in cash that Blackstone is paying for Dynegy is a 62% premium to Thursday's closing price, causing the massive spike in shares of the electricity market company.The Dynegy-Blackstone deal was causing a spike in share of wholesale power sales companies. RRI Energy (RRI) and Mirant (MIR) had among the largest gains in the equity market on Friday morning, up between 7% and 8%. Both merchant energy companies had reached their average daily trading volume within an hour of the market open. Notably, both RRI Energy and Mirant had traded at 52-week low prices on Thursday. Wholesale power provider Calpine (CPN - Get Report) was also up more than 6% on Friday morning. Concurrent with the privatization of Dynegy, Blackstone is selling four natural-gas plants to NRG Energy (NRG - Get Report) for $1.36 billion. It's not a done deal yet. Dynegy has a 40-day period during which it can solicit potentially higher or better bids.