On April 30th, I wrote about a buyout offer on my shares of Wrigley (WWY) from Mars. In that same post I wrote about purchasing shares of Calpine (CPN) which was one of my first non-dividend stocks I have purchased in several years.
My reasons for purchasing the Calpine:
1. Low cost producer of energy
2. One of the greenest producers of energy
3. Young age of power plants
4. The raising cost of building new power plants
5. I think the stock will start to pay a dividend over the next few years.
Well today Calpine (CPN) was offered a buyout from NRG Energy (NRG). NRG offered 0.534 share of its stock for each Calpine share and based on NRG's trading price on Thursday, the offer values Calpine at $21.76 per share.
I think this deal will happen for a price closer to $24 than the current offer of $21.76 and here's why. The hedge fund Harbinger Capital Partners, which owns more than 24 percent of Calpine's shares, said the offer represents a good starting point and that Calpine's board should immediately negotiate with NRG over terms.
I bought the stock on April 28th for $20.25 a share and after a couple of weeks I now have a gain of over 11% on the stock. I am hoping for a couple more dollars a share after further discussions between Calpine and NRG.
I also purchased more shares of Royal Bank of Scotland (RBS) today after yesterday's big drop.
Disclosure: The Div Guy owns shares of WWY, CPN and RBS at the time of this post.