NRG Energy offers to acquire Calpine for $11.3 billion

22 May 2008

NRG Energy has offered to acquire rival power producer Calpine Corporation in an all-stock deal that values the company at $11.3 billion, the companies said in separate statements.

NRG offered to exchange 0.534 share for each Calpine share, a premium of 6.7 per cent based on the closing prices of the companies' current stock prices.

NRG, based in Princeton, NJ, confirmed the offer, made on 14 May. The bid, initially valued at $22.98 a share, was worth $22.70 a share on Wednesday, putting the cost for 500 million of Calpine shares at $11.3 billion.

San Jose-based Calpine, which emerged from bankruptcy proceedings in January, said the board would review the proposal.

Calpine, with corporate offices in Houston and San Jose, California, had sought bankruptcy protection from creditors in late 2005.

A merger of the two power companies would create a nationwide force for wholesale electricity distribution.