NRG makes unsolicited $11 bln bid for Calpine

By Michael Erman

NEW YORK (Reuters) - Power company NRG Energy Inc (NRG.N: Quote, Profile, Research, Stock Buzz) has made an unsolicited bid to buy competitor Calpine Corp (CPN.N: Quote, Profile, Research, Stock Buzz) for about $11 billion in stock, the companies said on Wednesday.

Calpine, which emerged from bankruptcy earlier this year, said it was reviewing the bid to determine if it was in the best interests of its shareholders.

It said it received the unsolicited proposal from NRG on May 14. Under the terms of that proposal, Calpine shareholders would receive 0.534 shares of NRG stock for every Calpine share.

That would value Calpine shares at around $22.70 a share, giving shareholders a premium of about 6.7 percent based on the shares' Wednesday closing prices.

New Jersey-based NRG said a deal would create a multi-fuel power company with four regional generation businesses in all the major competitive power markets in the United States. It said each of those businesses would have at least 8 gigawatts of existing generating capacity.

"We think what we've put on the table is a compelling value proposition," NRG Chief Executive David Crane said in an interview.

"Our point of view is that the premium we've offered is just one part of the (deal's) value ... these companies together have tremendous value creation potential," he said.

Crane said Calpine's chairman, William Patterson, called on Friday to say they were giving the offer serious consideration, but gave no details on timing or how the board was leaning. He said he had not heard from the Calpine board since.