May 22 (Bloomberg) -- NRG Energy Inc., the second-biggest power company in Texas, made an unsolicited $9.6 billion offer for Calpine Corp. to become the largest independent electricity producer in the U.S.

NRG offered 0.534 share for every Calpine share, or 6.7 percent above yesterday's closing price on the New York Stock Exchange, the two companies said in separate statements. The valuation is based on the number of outstanding shares.

The takeover would double NRG's capacity in the U.S. to about 45,000 megawatts, enough to power 36 million homes. The Princeton, New Jersey-based company also stands to benefit from Calpine's focus on using cleaner-burning natural gas as lawmakers seek to reduce carbon-dioxide emissions. Calpine is the largest U.S. producer of electricity from gas-fired plants.

``Calpine is an almost pure play on gas-fired generation, so their carbon footprint would be attractive,'' said Gordon Howald, an analyst at Calyon Securities in New York who has a ``buy'' rating on NRG shares and doesn't own any.

Proposed climate-change legislation sponsored by senators Joseph Lieberman and John Warner aims to reduce emissions by 66 percent from 2005 levels by 2050. The Senate is scheduled to begin debate on the measure next month. Carbon dioxide comes from burning fossil fuel and is blamed as the biggest contributor to global warming.

San Jose, California-based Calpine controls more than 23,800 megawatts of generating capacity via interests in 60 gas- fired plants throughout the U.S. and 17 geothermal power plants in California, according to Hoover's Inc.

Reviewing Proposal

Calpine went into bankruptcy in December 2005 after gas costs surged and a power glut held down electricity prices. It exited bankruptcy protection on Jan. 31.

NRG, founded in 1989 and the owner of power plants in North America, Australia, Brazil and Germany, confirmed the offer in a statement, saying it made the bid in a May 14 letter because of the regional expansion and fuel diversity it provides.

``It would be unparalleled. There is nothing like this in the competitive power generation industry,'' NRG Chief Executive Officer David Crane said in a telephone interview late yesterday. ``It's really the ideal that people have talked about from time to time.''

Margins at a Houston natural-gas fired power plant may fall by about 50 percent next year to $5 a megawatt hour from the balance of this year, Barclays Capital said in April, reducing profit from power generation for producers. The so-called Spark Spread for ERCOT, the Texan power market, yesterday fell 15 percent to $6.2 a megawatt hour.

`Right Deal'

Crane, in NRG's statement, called the proposal ``the right deal, at the right point in time, between the right partners.''

Chicago native Crane joined NRG in 2003 from London-based International Power Plc to save it from bankruptcy and it emerged from protection in December that year. He's also been head of global power at investment bank Lehman Brothers Inc.

Calpine said in its statement yesterday the company's board will review NRG's proposal.

Crane said he's hopeful Calpine will provide a positive response. Calpine is led by Chief Executive Officer Robert P. May, who joined in December 2005.

Either ``it makes sense to both parties and we go forward or we shake hands and go our separate ways,'' Crane said. NRG needs about three weeks to conduct due diligence, he said.

Harbinger Statement

The combined company may sell about 3,000 to 5,000 megawatts of capacity in Texas, Crane said. One megawatt is enough power for about 800 average U.S. homes, based on an Energy Department estimate.

The confirmations from the companies followed a statement from Harbinger Capital Partners earlier yesterday that it sent a letter to Calpine about the proposed deal.

Harbinger, which invests in distressed assets, said its funds own more that 24 percent of Calpine's outstanding shares, making it the largest shareholder.

The New York-based investment company said in the letter it had ``yet to identify anything objectionable about the offer that cannot be resolved through negotiation.'' It also asked that Calpine's search for new management be put on hold so the NRG offer could be considered.

The statements were released after the end of regular U.S. trading yesterday. NRG closed at $42.51 in New York Stock Exchange composite trading yesterday, while Calpine was at $21.28. In after-hours trading, Calpine jumped 11 percent to $23.61 and NRG rose 3 cents to $42.54.

Texas Expansion

NRG is seeking to expand the South Texas Project nuclear plant southwest of Houston as demand for electricity climbs in the state. NRG applied last year to the U.S. Nuclear Regulatory Commission for two new reactors at the site. NRG also has plants in states such as California, Connecticut, Louisiana and New York.

NRG is the biggest power producer in Texas after Energy Future Holdings Corp., formerly known as TXU Corp. NRG's total U.S. generating capacity is about 22,880 megawatts, according to its annual report.

Calpine said Goldman, Sachs & Co. is serving as a financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel.

To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net

Last Updated: May 22, 2008 07:59 EDT