Exelon ups ante in NRG takeover
CEO: This is 'best and final offer'
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What's next?
Both companies nominated NRG Energy board of directors, a group that shareholders will vote on at NRG's annual meeting on July 21. The outcome of that vote could determine if the sale goes through. Exelon nominated nine new ...
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What's next?
Both companies nominated NRG Energy board of directors, a group that shareholders will vote on at NRG's annual meeting on July 21. The outcome of that vote could determine if the sale goes through. Exelon nominated nine new independent directors, a group the nuclear company hopes can sway decisions its way.
Exelon Nuclear raised its hostile takeover bid for rival NRG Energy, but the move doesn't affect Victoria County plans, the company said Thursday.
"I can't predict what might or might not happen over the next few years. But I can say the Victoria project will proceed or not based on its own merits," said Craig Nesbit, an Exelon spokesman.
Exelon disclosed its revised bid a day after announcing it will delay by at least three years its decision to build a plant locally.
Exelon wants to merge with NRG, which owns a 60 percent stake in the South Texas Project and proposes two new Bay City-area reactors.
NRG is one of four likely recipients of $18.5 billion in federal loan guarantees, needed backing Exelon didn't receive for the Victoria County plant.
Exelon said Thursday it raised its takeover bid to about $8 billion in stock, or an exchange of 0.545 shares of its stock for each NRG share, a 12.4 percent increase from its earlier offer.
Exelon first offered to buy NRG in October, but the deal was rejected.
John Rowe, Exelon's chief executive officer, said in a statement that this is the company's "best and final offer."
Exelon increased its bid citing new cost savings - last month, the company announced plans to layoff 500 employees - and NRG's recent acquisition of Reliant Energy's retail business.
NRG spokesman David Knox declined comment, but he e-mailed a news release detailing the target company's response.
"NRG stockholders are advised to take no action at this time pending the review by NRG's board of directors," the news release noted.
Jefferies & Company, an independent investment banking firm and third-party analyst, suggests Exelon's bid is still too low.
"Since we find it very unlikely Exelon will raise the offer again, we therefore believe the deal hinges on what NRG shareholders think of the revised offer," the investment company noted in an e-mail. "We're uncertain, but our sense is that shareholders will also find it too low."
Shareholders meet July 21 for NRG's annual meeting.
Kathleen Cantillon, an Exelon spokeswoman, said the nuclear company will try to sell the new offer to NRG shareholders.
"Remember that when the tender offer expired on Feb. 26, Exelon had received a majority of the outstanding shares of NRG common stock, 51 percent, in support of the deal - and now the offer has been increased," Cantillon said.
