Advisory firms vote 'no' to Exelon takeover
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The nation's four leading proxy advisory firms recommend NRG Energy shareholders vote against Exelon Nuclear's push to expand the company's board of directors.
Exelon wants its nine nominees added to NRG's board of directors so it has enough votes to likely complete its hostile bid to take over the energy giant.
The recommendation against this move, released Monday, comes one week before NRG shareholders vote whether to expand its board of directors.
"Regardless of the outcome with Exelon, our board and management will remain committed, as we always have been, to driving value for our stockholders and remaining open to offers at the right price and on the right terms," said David Crane, NRG's president and chief executive officer.
Exelon, which began hostile takeover efforts late last year, increased its bid two weeks ago to $6.97 billion, but NRG's board of directors again rejected the offer. They say the bid undervalues NRG's worth.
The four proxy advisory firms who offered the recommendation are RiskMetrics Group, PROXY Governance Inc., Glass Lewis & Co., and Egan-Jones Proxy Services. They, too, said the bid undervalues NRG's worth.
Kathleen Cantillon, an Exelon spokeswoman, said in an e-mail that NRG shareholders will make their own decisions based on the merits of the bid.
"No other transaction or strategy can do more for NRG shareholders, and we believe shareholders will recognize that while the election of nine new independent directors doesn't ensure a deal will take place," Cantillon said, "it does create the opportunity for meaningful discussion that could lead to a deal."
If Exelon takes over NRG, the move may push back its decision to build in Victoria County. Already, the company moved the decision's deadline to at least 2012 - back from its original 2010 target date.
NRG shareholders vote during their annual meeting on July 21.
Comments
The logic of this blog appears rather sound to me. Also, what is not brought out in the blog an increase in board members increases the cost of board members, it reduces the stockholders influence over the board, makes it easier for the board members to pass the buck, and reduces ability to come to a consensus.
July 13, 2009 at 10:02 p.m.The board of directors and officers in large corporations often are "good old boy" systems. I will vote for A to be President, if you vote for a wage increase for VP President B who is my cousin.
The more board members the more back room deals.