From the NYT's DealBook blog:
NRG Energy’s roughly $11 billion unsolicited bid for Calpine has generated a lot of excitement in the normally sleepy power M&A space. There hasn’t been a major power generation hook-up in the United States in eons — or it sure feels that way — because of myriad internal industry struggles and regulatory roadblocks.
This match-up may bypass obstacles that have ensnarled other attempted deals. Nevertheless, the question remains as to what would be a fair price for Calpine. Based on stock prices around midday Thursday, NRG’s offer of 0.534 shares for every Calpine share is now $1 below where Calpine’s shares were trading. So the market seems to believe that NRG will probably need to raise its offer, most likely because it suspects another bidder will try to make a move on Calpine.But it’s hard to see many other suitors for Calpine....MORE
From the Wall Street Journal's Environmental Capital blog:
The Lieberman-Warner climate bill hasn’t even hit the floor of Congress, but its impacts may already be hitting the market.
That’s the first reading of NRG Energy’s unsolicited, $11 billion all-stock bid for troubled rival Calpine Corp., a move which would create the biggest independent power producer in the U.S. NRG and Calpine are roughly the same size today, and a combined company would have about 45 gigawatts of generation capacity.
What’s so attractive about Calpine, which just got out of bankruptcy–besides a $5 billion tax carryover? It’s the biggest electric utility in the U.S. that doesn’t burn any coal–it just operates natural gas-fired turbines and some geothermal plants. NRG, on the other hand, is still coal-heavy despite a recent push into cleaner technologies like wind and nuclear power. About two-thirds of the electricity it produced in 2006 came from coal....MORE