Fri, August 18, 2017 10:26 am

This morning, natural gas-heavy independent power producer Calpine Corp (CPN) issued a press release confirming that private equity firm Energy Capital Partners (Energy Capital) and a consortium of investors would acquire CPN for $15.25/share in cash, for a total of $5.6 billion. The announcement does not come as a surprise, as CPN confirmed during its Q2 earnings call that it was in negotiations with a prospective buyer and rumors in the media pinned Energy Capital as the then-unconfirmed suitor. The consortium of investors is led by privately-held Access Industries and the Canada Pension Plan Investment Board. The reported sales price is a 13.0% premium over yesterday’s close, and a 51.4% premium over the close on May 9th, just prior to acquisition rumors hitting the media. Energy Capital anticipates no near term changes in operations at CPN, which will continue to maintain corporate headquarters in Houston, Texas with the current management. A 45-day go-shop period has begun, with a termination fee payable by CPN of $142 mm if a superior offer is accepted, $65 mm if that offer is from “certain exempted persons”. The all-cash transaction is expected to close in Q1 2018.