NRG Energy rejects Exelon's 'opportunistically timed' offer

By Lisa Kerner

Charlotte, N.C., Nov. 10 - NRG Energy, Inc. said its board of directors unanimously rejected an Oct. 19 unsolicited offer from Exelon Corp.

The board reviewed Exelon's proposal with its advisers and determined that it is not in the best interests of NRG shareholders.

In the proposed offer, each NRG share would be exchanged for 0.485 Exelon shares for a value of about $26.43 per share, it was previously reported.

According to an NRG news release, the board believes Exelon's "opportunistically timed proposal grossly undervalues NRG on both an absolute basis and relative to Exelon's share value."

NRG, a Princeton, N.J.-based power company, also noted that Exelon does not have committed financing and the company's credit rating was downgraded a few days after it made the offer.

Exelon, a Chicago-based electric company, said the financing plan for its $6.2 billion unsolicited offer for NRG would require only $4 billion or so of refinancing and that the needed financing commitments are "well underway," according to an earlier 425 filing with the Securities and Exchange Commission.

In a letter to Exelon, NRG said it believes "the substantial decline in NRG's stock price is an unwarranted aberration" that overlooks the company's growth potential, stability, liquidity and cash flow generation.

It was previously reported that Exelon said NRG's failure to respond more promptly to its offer was creating uncertainty for NRG shareholders.

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