U.S. power producer Calpine Corp (CPN.N) said it would be bought by a group of investors led by Energy Capital Partners for $5.6 billion, as the debt-laden company struggles to keep up with depressed commodity prices.
The $15.25 cash per share offer, represents a 13 percent premium to Calpine’s closing price on Thursday.
Shares of the company, which owns about 80 power plants in the United States and Canada, were up 9.7 percent at $14.81 in premarket trading on Friday.
U.S. power producers have been hit by low wholesale power prices due to cheap natural gas, growth of renewable energy and subsidized nuclear power in certain states.
Calpine, which relies mostly on natural gas to generate power, said in July it was looking at strategic alternatives, including a sale, after reporting losses for three quarters in a row.
The company’s debt, as a net of current portion, was about $11.31 billion, as of June 30.
Billionaire industrialist Leonard Blavatnik’s Access Industries and Canada Pension Plan Investment Board (CPPIB), the country’s biggest pension fund, are part of investor group led by Energy Capital.
CPPIB, which has been actively expanding its energy assets in international markets, said it would invest $750 million in the Calpine deal.
Energy Capital, a private equity fund which largely invests in energy infrastructure, is also the biggest shareholder in Calpine’s rival Dynegy Inc (DYN.N).
Lazard was Calpine’s financial adviser and White & Case LLP was its legal adviser. Barclays Capital Inc was Energy Capital’s financial adviser and Latham & Watkins LLP its legal adviser.