CenterPoint ( CNP) just threw a curveball.

The Texas utility has decided to shed its valuable generation business -- near its current market price -- in the midst of a crucial regulatory hearing. The company announced on Wednesday that it has inked a $3.65 billion deal to sell Texas Genco to some high-profile private-equity investors. The news comes during the middle of a regulatory hearing designed, in part, to determine Genco's true value.

CenterPoint is seeking to recover stranded costs from its investment in Genco as part of a heated "true-up" hearing in which billions of dollars are at stake. Many people had simply assumed that CenterPoint would wait for a final ruling from regulators, due next month, before proceeding with the sale.

"I was very surprised at the timing -- but not at the price," said Harry Chernoff, an analyst at Pathfinder Capital Advisors who owns Genco stock.

The transaction requires Genco to first buy out the public investors who own 19% of its stock at a price just 52 cents above Tuesday's close of $46.48 a share. CenterPoint will then turn around and sell the rest of the company for an even lower price, $45.25 a share.

Chernoff believes CenterPoint is receiving an "excellent price" -- far above Wall Street predictions -- for the generation company. But some Genco investors feel shortchanged about the sellout to a new firm controlled by the Blackstone Group, Hellman & Friedman and Kohlberg Kravis Roberts.

Some were hoping for a secondary offering of Genco's remaining stock instead. They feel that public investors would pay more for the stock and then go on to benefit from things like operational improvements, share buybacks and higher dividends. They believe that CenterPoint has continually failed to maximize Genco's value and -- in a final blow -- is now selling the company to private owners on the cheap.

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