A California investment group offered to buy small stakes in energy traders

Dynegy

(DYN)

and

Mirant

(MIR)

at big premiums to their market price.

Mirant urged shareholders to reject the offer on grounds the acquirer could tie up their shares indefinitely without actually buying them. Dynegy took no position but urged investors to proceed with extreme caution.

Main Street Acquisition Corp. offered to pay $4.97 a share for up to 4.9% of Mirant's outstanding shares; the stock closed at $3.38 Wednesday. The group also said it would pay $2.88 each for a similar block of Dynegy; its shares ended Wednesday at $2.17.