Barrett And Segal of Luminus Management Boost Stake In Calpine Corporation (CPN); Amend Initial Agreement

Jonathan Barrett and Paul Segal have decided to boost their fund’s stake in Calpine Corporation (NYSE:CPN), following an agreement between Calpine and LS Power Equity Advisors, LLC, for the latter to buy some of Calpine’s assets. Barrett and Segal’s fund, Luminus Management, has reported an increase in its stake from 6.59 million to approximately 41.2 million shares, which account for 9.7% of the company’s common stock.

According to the agreement, LS Power Equity Advisors is set to buy six power plants owned by one of Calpine’s subsidiaries, for $1.57 billion in cash. This transaction is a part of Calpine Corporation (NYSE:CPN) plan to dispose of some of its non-core assets and use the proceedings to develop its core operations. The agreement between the two companies has been recently amended, with Luminus Management agreeing no to dispose of any shares before the transaction takes place.

Calpine Corporation (NYSE:CPN) has also attracted the attention of Lee Ainslie, who has built an important position during the last quarter of 2013. According to its latest 13F filing, his fund, Maverick Capital, owns 9.42 million shares worth approximately $183 million. Larry Robbins of Glenview Capital is also keeping tabs, with his fund holding 4.42 million shares valued at $86.3 million.

Calpine Corporation (NYSE:CPN) engages in the operation and management of natural gas-fired and geothermal power plants. The company has a market cap of $9.48 billion and does not pay a dividend. For the three months ending December 31, 2013, the company posted revenues of $1.43 billion and a loss per share of $0.11. Analysts expect Calpine to announce revenues of $1.32 billion and a loss of $0.11 per share for the first quarter of 2014.

Barrett and Segal have made several notable changes to their fund’s portfolio during the 2013 fourth quarter, one of the being a massive increase in its holding of Exelon Corporation (NYSE:EXC), an energy company. In its latest 13F filing, Luminus Management reported ownership of 5.09 million shares valued at $139 million. Jim Simmons is also bullish on the stock, having initiated a new position during the  fourth quarter of 2013. Barrett and Segal have also upped their stake in Entergy Corporation (NYSE:ETR) to 1.25 million shares valued at $79.6 million.

Disclosure: none.

Recommended reading:

Greenlight Capital 2014 Q1 Investor Letter

Lone Pine Capital Surges Position in Michael Kors Holdings Ltd (KORS)

Hedge Fund News: Bill Ackman, Crispin Odey & David Tepper