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Energy Market Deals: Dynegy, Allis-Chalmers

(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.

Dynegy, which sells electricity, agreed to be taken private by the Blackstone Group (BX - Get Report) for $4.7 billion, including debt, one of the biggest leverage buyout deals of 2010.

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.
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