Harbinger Capital Partners

January 30, 2007 22:13 ET

Harbinger Receives Requisite Court Approval to Acquire CCPL Assets; Removes Condition to Harbinger's Increased Offer for Calpine Power Income Fund

CALGARY, ALBERTA--(CCNMatthews - Jan. 30, 2007) -


Harbinger Capital Partners today announced that the Court of Queen's Bench of Alberta (the "Court") has accepted the January 27, 2007 offer (the "Class B Offer") by its indirect wholly-owned subsidiary HCP Acquisition Inc. ("HCP") for all of the Class B subordinated units of Calpine Power, L.P. and certain administration, management and other agreements between affiliates of each of Calpine Power Income Fund (the "Fund") and Calpine Corporation. As previously announced, such approval was a pre-condition to HCP increasing its take-over bid for the trust units of the Fund (the "Harbinger Offer") to $13.00 in cash per trust unit pursuant to a support agreement entered into among HCP, the Fund and Calpine Commercial Trust ("CCT") on January 27, 2007 (the "Support Agreement"). That condition has now been satisfied.

The increased offer price of $13.00 per trust unit represents a premium of 24.4% compared with the closing price of $10.45 for the Fund's trust units on December 19, 2006, the day prior to the initial Harbinger Offer and an increase of 6.1% compared with the initial Harbinger Offer price of $12.25. As previously announced, the Board of Trustees of CCT on behalf of the Fund has determined that the increased Harbinger Offer is fair to unitholders of the Fund and in the best interests of the Fund and its unitholders, and is recommending that the Fund's unitholders accept the increased Harbinger Offer. The Trustees' financial advisor, BMO Capital Markets, has provided an opinion that the consideration to be received under the increased Harbinger Offer is fair, from a financial point of view, to unitholders other than Harbinger.

HCP anticipates tomorrow filing a notice of variation and extension which will set out the terms and conditions of its amended offer and which thereafter will be mailed to unitholders together with a notice of change to the circular of the CCT Trustees recommending that unitholders accept the increased Harbinger Offer. Such documents will be available on the System for Electronic Document Analysis and Retrieval at www.sedar.com.

The expiry time of the Harbinger Offer will be extended from 9:00 p.m. (Calgary time) on February 5, 2007 to 9:00 p.m. (Calgary time) on February 12, 2007. Completion of the Harbinger Offer is subject to certain conditions, including, among other things, a sufficient number of the Fund's trust units being tendered to the offer such that HCP would own at least 66 2/3% of the outstanding trust units, receipt of all necessary regulatory approvals and no material adverse changes concerning the Fund. Under the terms of the Support Agreement, the Fund has agreed to defer the separation time of the rights issued under the Fund's unitholder rights plan in respect of the Harbinger Offer and to waive, suspend the operation of or otherwise render the rights plan inoperative against the Harbinger Offer.

The Support Agreement provides that HCP has the right to match any offer made by another bidder and also provides for the payment of a fee to HCP by the Fund of $23.3 million under certain circumstances if the Harbinger Offer is not completed.

Cautionary Statements

This news release contains forward-looking statements, which reflect HCP's and Harbinger Capital Partners' current beliefs and expectations. These forward-looking statements are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Undue reliance should not be placed on forward-looking statements.

This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. The Harbinger Offer is not being made to, nor will deposits be accepted from, or on behalf of, unitholders in any jurisdiction in which the making or acceptance of the Harbinger Offer would not be in compliance with the laws of such jurisdiction. However, HCP or its agents may, in the sole discretion of HCP, take such action as HCP may deem necessary to extend the Harginger Offer to unitholders in any such jurisdiction.

This announcement contains certain information relating to the Fund and its subsidiary entities. Neither HCP nor Harbinger Capital Partners have had any due diligence access to the Fund or its subsidiary entities. The information in this announcement relating to the Fund and its subsidiary entities has been compiled from information included in public documents filed by the Fund only and has not been commented on or verified by the Fund, its trustees, or Harbinger Capital Partners or HCP. HCP and Harbinger Capital Partners believe that they are not in possession of any material non-public financial or other information in respect of the Fund or its subsidiary entities.

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