Calpine board rejects NRG's 'inadequate' offer, says future negotiations possible

By Lisa Kerner

Charlotte, N.C., May 30 - Calpine Corp.'s board of directors, along with its advisers, unanimously determined that NRG Energy Inc.'s proposal to acquire the company is inadequate.

In a statement released on Friday, Calpine said the proposal "materially undervalues the company's unique asset portfolio and future prospects."

NRG's proposal included an all-stock merger transaction at a fixed exchange ratio of 0.534, or about $23 per share, it was previously reported.

The Calpine board has authorized its advisers to contact NRG and its advisers to determine if there is a basis for further discussions between the two companies, the Calpine news release stated.

"We respect the Calpine board's decision but are disappointed that they have decided not to move quickly to deliver the benefits of our proposal to Calpine's shareholders," NRG president and chief executive officer David Crane said in response to Calpine's decision.

"We continue to believe that our proposal offers significant strategic and financial benefits and we remain interested in a combination with Calpine on the terms we have proposed," Crane added in his company's news release.

Calpine shareholder Harbinger Capital Partners Funds had urged the company to discuss terms with NRG, calling the offer a "good starting point."

The 24% shareholder called Calpine's current situation "untenable," noting that the San Jose, Calif., power company is basically run by a consultant and a part-time chief financial officer.

NRG is a wholesale power generation company based in Princeton, N.J.

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