UPDATE 2-NRG has made bid for Calpine -- shareholder

(Recasts, adds background, updates share price)

NEW YORK, May 21 (Reuters) - Calpine Corp's (CPN.N: Quote, Profile, Research) largest shareholder said on Wednesday NRG Energy Inc (NRG.N: Quote, Profile, Research) has bid more than $9.7 billion for the power company.

Hedge fund Harbinger Capital Partners, which owns more than 24 percent of Calpine's shares, said in a letter to members of the Calpine board that NRG had proposed a merger with Calpine on May 14, at a premium to the company's share price that day.

The shares of Calpine, which emerged from bankruptcy in January, closed at $20.40 on May 14.

Harbinger said it believes the offer represents a good starting point and that Calpine's board should immediately negotiate with NRG over terms.

A Calpine spokesman had no comment. NRG spokesman David Knox said the company does not comment on market rumors.

NRG shares closed up 36 cents to $42.51, while Calpine added 8 cents to $21.28, both on the New York Stock Exchange. Calpine rose 3.4 percent to $22 in light trading after the market closed. (Reporting by Michael Erman; additional reporting by Eileen O'Grady in Houston; editing by Jeffrey Benkoe and Andre Grenon)