Carl Icahn's $665 million cash takeover of power producer Dynegy Inc. received clearance from the Federal Trade Commission on Tuesday.

The billionaire investor's deal follows a failed bid by private equity firm Blackstone Group LP. Icahn, Dynegy's largest shareholder, opposed the $5 per share deal arguing it undervalued the company.

The Icahn Enterprises LP offer was 10 percent higher than Blackstone's bid and calls for Dynegy to continue soliciting other buyers until Jan. 24.

Dynegy, based in Houston, has struggled amid soft power prices and high debt, which stands at about $3.95 billion.