Oaktree Capital Group Acquires 7.23% of Dynegy Inc. – ValueWalk Premium
Howard Marks Oaktree

Oaktree Capital Group Acquires 7.23% of Dynegy Inc.

Howard Marks’ Oaktree Capital Group LLC (NYSE:OAK) acquired a 7.23% stake in Dynegy Inc. (NYSE:DYN) according to an SEC form 13G filing.  According to the filing, Oaktree Capital Group LLC (NYSE:OAK) bought 7,233,893 shares of common stock in the Texas-based Electric Utilities company.

Oaktree Capital Group Acquires 7.23% of Dynegy Inc.

An excerpt acquired its stake in Dynegy under different arms of investment, including Oaktree Opportunities Fund VIII Delaware, L.P., a Delaware limited partnership, which has a direct control, or ownership, of 4,086,348 shares of common stock; Oaktree Huntington Investment Fund, L.P., a Cayman Islands limited partnership, which now has a direct ownership of 1,137,638 shares, and Oaktree Capital Management, L.P., a Delaware limited partnership in its capacity as the duly appointed investment manager of each of HY Fund, HY Fund II, HY Trust, and certain separate accounts, including a sub-fund of a Luxembourg SICAV, which will manage a total of 1,065,226 shares, among others”.

There is no shared voting or disposal power, whereas the sole voting and disposal powers is prorated according to the number of shares held by each investment arm.  Oaktree Capital Group LLC (NYSE:OAK), which combines all the stakes, has a voting, or disposal power equivalent to 7,233,893, or the total sub-acquisitions combined.

Oaktree is one of the largest debt holders of Dynegy Inc. (NYSE:DYN). The company is reportedly preparing to file for Chapter 11.

Dynegy Inc. (NYSE:DYN) has 122.89 million shares of common stock outstanding. The company has a market cap of $2.24 billion, roughly equal to its Enterprise Value. Dynegy Inc. (NYSE:DYN), engages in the production and sale of electric energy, capacity, and ancillary services in the United States. Some of its direct competitors include American Electric Power Co., Inc. (NYSE:AEP), Duke Energy Corporation (NYSE:DUK), and Edison International (NYSE:EIX).

Dynegy Inc. (NYSE:DYN)’s expected 5 year price to earnings growth ratio is projected at 0.52 times, as compared to the industry average of 2.85 times. All its competitors’ PEG ratios are above 4x, with Edison International holding the highest expectation at 6.24x.

Dynegy Inc. (NYSE:DYN) closed at $18.21 per share on Friday, 9, up $0.21, or 1.17% rise from Thursday’s close.


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