not good Reliant Energy May Be Seeking Buyer HOUSTON (AP) ― Reliant Energy Inc. said Monday it is looking for a buyer amid turmoil in the credit markets and a violent storm season that cost the electricity provider millions. Reliant said it is exploring "strategic alternatives," a term typically used by companies considering a sale, either whole or partial. Just a week ago, the energy retailer cut its profit forecast and said it had to raise $1 billion because of damage from Hurricane Ike and a new credit arrangement. The company said Hurricane Ike, which struck the Texas Gulf Coast earlier this month, reduced sales volumes and increased operating costs at its retail unit. Reliant now expects to book $350 million in contribution margins from this business in 2008, down $300 million from a prior forecast. Reliant said then it couldn't meet existing credit conditions set by Merrill Lynch, and had to raise new capital through the sale of preferred stock and a costlier credit facility. Lower commodity prices, warm weather and lower off-peak energy prices were expected to take $480 million from its contribution margin in the wholesale energy business, the company said. Reliant has a retail customer franchise and a portfolio of wholesale generation assets. "In light of the challenges facing our industry and the economy as a whole, we believe it is appropriate to explore the full range of options to enhance stockholder value while we continue to execute on our current business plan," Mark Jacobs, president and chief executive, said in a statement. The board formed a special committee comprised of Evan J. Silverstein, the chair, Steven L. Miller, Joel V. Staff and William L. Transier, to oversee the process and make recommendations to the full board. In addition, Staff will serve as executive chairman. Morgan Stanley and Goldman Sachs & Co. are serving as financial advisers, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to Reliant. Shares plunged last week and slipped Monday morning 6 cents to $5.53, more than 60 percent below share prices last month. (© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Well... at this point is a gamble. Best case, someone swoops in and pays a premium for Reliant. Downside, Reliant goes bankrupt and what was worth $5 is now worth $0.11.
I have the worst luck. I went from National Power to Riverway to Reliant. The first 2 went bankrupt and forced me to Reliant.
I hope he puts in some sort of stipulation for the new buyer that they cannot move the team. could you imagine? The San Antonio Texans? (mouth puke )
What I'm gathering is that if you buy the naming rights to a new Houston stadium, your business is doomed.
You guys don't have much financial experience. Typically, exploring strategic alternatives is a move that is welcomed by shareholders, as it's a signal that management believes the stock is worth more than the current market valuation.
Your post does not make sense. The price drop happened before the call to explore strategic alternatives. That's why they made the call. At this point, it's the best move they could make to enhance shareholder value.
fail. tj u should really try reading more before acting like you have a clue. they are doing this for survival. they need money and money is hard to come by in this tight credit market. http://biz.yahoo.com/ap/081006/reliant_energy.html?.v=5 more about the capital raise and slashed guidance here http://biz.yahoo.com/ap/080930/reliant_energy_mover.html?.v=1
