Calpine rejects NRG offer, but leaves wiggle room

NRG's offer comes about four months after Calpine emerged from a two-year reorganization under bankruptcy protection that cost more than 1,000 employees their jobs. NRG itself left Chapter 11 bankruptcy protection in 2003.

Calpine, which maintains corporate offices in Houston and San Jose, Calif., continues to operate in a state of transition. A search is under way for a replacement for Chief Executive Robert P. May, the turnaround specialist who said in February he would step down once a successor is in place. An interim chief operating officer was named earlier this month.

NRG has said it believes it can wring at least $100 million in annual cost savings from the deal, suggesting further job cuts are likely.

Some analysts that follow the company put the figure far higher. In a note to investors Thursday, Calyon Securities analyst Gordon Howald predicted $300 million in ongoing savings.

Calpine operates 60 power plants that can produce up 23,000 megawatts of electricity, or enough to power more than 17 million homes. NRG has 49 plants with a total capacity of 24,120 megawatts.

Calpine shares rose 21 cents to $22.90. NRG shares added 78 cents to $41.59.