Talen expects to fund a $1.5 billion buyback with future capacity payments and names Terry Nutt chief executive

Talen Energy, which owns the Susquehanna nuclear plant and sells power in the PJM market, said Tuesday it will pay $1.5 billion to buy back shares, enough at the current stock price to retire more than 10% of its shares.

It expects to fund the purchase mainly by borrowing against about $1.5 billion of capacity payments PJM has already awarded. PJM runs a large power grid in the eastern United States, and those payments are for having plants available in the 2027/2028 and 2028/2029 years, separate from what a plant earns by selling electricity. Citi is providing the financing at SOFR plus 200 basis points.

The announcement came at 4:05 p.m. Eastern, after the close. Shares finished the regular session at $314.84, up 3.7%.

Talen will pay Goldman Sachs and Banco Santander the $1.5 billion and take about 4 million shares at the start, about 80% of the number expected at the September 28 close.

In August, $1.7 billion of buyback room was left through December 2028. The board has now set remaining capacity at $3 billion through December 31, 2028. Tuesday's repurchase uses $1.5 billion of that and leaves $1.5 billion.

Talen forecasts about $4 billion of adjusted free cash flow from the second half of 2026 through 2028. After the brought-forward capacity revenues are counted, it expects about $2.8 billion in that period, and said that still leaves room for further buybacks.

Talen said the financing leaves its liquidity in place and is consistent with a net leverage target of 3.5 times. It expects to meet that target in the second half of 2027, and expects the ratio to fall after that as the capacity payments arrive and the related obligation declines.

The board named its president, Terry Nutt, chief executive from January 1, 2027, when he will also join the board. Mac McFarland stays chief executive and a director through December 31, 2026, then serves as a senior adviser and retires in March 2027.

Nutt has been president since December 2025, and was chief financial officer from July 2023 through December 2025. Before Talen, he was chief financial officer and a managing director at EDF Trading North America.

Nutt said one of his priorities is to "allocate capital with discipline," and that Tuesday's repurchases reflect that approach "by reducing our share count at what we believe is an attractive free cash flow yield, while preserving liquidity and strategic flexibility."

The final share count will be set by the average price minus a discount, and will not be known until the deals settle, which Talen expects by the end of March 2027. A higher average price means fewer shares for the same money.