Calpine surges on $11.3 billion NRG buyout offer

Shares of power wholesaler Calpine Corp. jumped Thursday after NRG Energy Inc. offered to buy the company in a move analysts said could open up buyout chatter elsewhere in the sector.

NRG's all-stock offer for Calpine was valued at $10.8 billion as of Thursday's close. Analysts said the deal would make sense for NRG if the price was right. The initial offer, on May 14, valued Calpine shares at $22.98 per share, and Brian Chin of Citi Investment Research said a fair price would not go above the mid-$20 range. The per-share price is currently valued at $21.55 per share.

Calpine stock rose $1.72, or 8.1 percent, to $23, and reached a high of $23.36. Shares began trading in January. NRG shares fell $2.16, or 5.1 percent, to $40.35.

Chin said the last buyout in the sector was the $32 billion purchase of TXU Corp. by private equity firms Kohlberg Kravis Roberts & Co. and TPG. That deal was announced in February 2007. The analyst said there is a "plethora of possibilities" for buyouts and singled out Reliant Energy Inc. as one company that could get more attention.

Reliant shares gained $1.01, or 4.1 percent, to $25.81.

Calyon Securities analyst Gordon Howald said NRG has a good track record with integrating buyouts, and he added investors "should be comforted" that NRG does not plan on making an extended buyout attempt if Calpine is resistant to the offer.