Mirant calls off sale; shares plunge

Mirant Corp. stock plunged 11% after the owner of power plants in six U.S. states said it had abandoned efforts to sell the company and would instead return $4.6 billion to investors through buybacks.

Mirant shares fell $4.89 to $37.51, their biggest one-day drop since they began trading in December 2005 as the company emerged from bankruptcy.

Mirant amassed more than $6 billion in cash after selling plants in the U.S. and assets in the Caribbean and the Philippines. Mirant, which on April 9 announced that it might put itself up for sale, concluded that the return of cash to shareholders was “the best course of action at this time,” Chief Executive Edward Muller said.

The Atlanta-based company also said it posted third-quarter net income of $775 million, or $2.74 a share, after settling a dispute with Potomac Electric Power Co. over contracts. That contrasts with a net loss of $26 million, or 9 cents, a year earlier. Sales fell 26% to $717 million.