• John Braden •
• Originally published January 15, 2009 at 10:52 a.m., updated January 15, 2009 at 10:52 a.m.

Exactly three weeks after receiving an unsolicited proposal from Exelon Corp. to purchase the $6.2 billion in stock currently held by NRG Energy Inc., the NRG’s Board of Directors unanimously declined to sell its 44 percent ownership in the South Texas Project Nuclear Operating Company on Nov. 9. According to an NRG press release, “The proposal from Exelon Corporation (NYSE: EXC) significantly undervalues NRG and is not in the best interests of NRG’s shareholders. The Board thoroughly reviewed Exelon’s proposal and reached its decision after careful consideration with its independent financial and legal advisors.” When making its decision, NRG board members decided that Exelon’s “opportunistically timed proposal” severely undervalued NRG on numerous basis. They said the proposed fixed exchange ratio of 0.485 Exelon shares per NRG share would unfairly allow for 17% of the combined company to contribute 30% of the recurring cash flow from the company. Also listed as a problem was the lack of committed financing on Exelon’s behalf and a downgraded credit rating. NRG Board members did, however, confirm to Exelon that the decision to deny the offer was “not an indication of disrespect for [their] company. Exelon undoubtedly is one of the top utility holding companies in the country,” they said. The offer may have temporarily rattled some employees and concerned residents, but STP officials wanted to ensure everyone that the company will do what it feels is necessary for the betterment of the people involved and welfare of the county. “STP has had number of different ownership changes in the past and is still one of the best power producers in the country,” said Buddy Eller, STP director of corporate communications and public affairs. “We have a strong reputation, and our employers are focused on keeping that. The offer that came about for NRG is the nature of what your seeing in a lot of different industries these days, such as banking and the airline business. Our owners have always been and remain focused on staying safe and reliable and will act in the best interest of their employees and stockholders, and that’s exactly what they did here.”

See the entire story in the Jan. Nov. 13 edition.

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