RE:Innergex Renewable Energy to buy Alterra Power in C$1.1 bln When a company pays a large premium to buy another company, their share price usually falls because they are paying more than market value for the company. That premium has to be absorbed by the purchasing company. A quick way to llok at it is to multiply the premium paid per share by the number of shares of the company being acquired, in this case about $3 times 58 million shares, or about $184 million of premium. Innergix has 108 million shares, so in theory the share price could have fallen by 184/108 or about $1.70 a share to fully absorb the premium. The shares are only down about 70 cents, so the market is thinking the deal is actually a pretty good one for Innergix, as the share price does not reflect the full premium being paid. Of course, if they thought it was a huge home run deal that was going to propel the cash flow and net income per share a lot higher very quickly the share proce might have even gone up.