Why Calpine Corporation's Shares Popped 10% Today
Shares of Calpine Corporation (NYSE: CPN) jumped as much as 10.4% in trading Friday after the wholesale utility company agreed to sell itself to a group led by private equity firm Energy Capital Partners for $5.6 billion. The offer price is $15.25 per share in cash, which is still a small premium from where shares are trading, at $14.85 at around 3:00 p.m. EDT.
Wholesale power markets have been hammered in recent years as cheap natural gas and zero marginal cost wind and solar power have taken away a lot of the formerly peak energy prices. Calpine and most of its competitors have seen earnings shrink as a result and that's called into question how the company will pay back $11.9 billion in debt.
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Source: Fool.com
