Exelon begins exchange offer for NRG, will seek changes to NRG's board

By Lisa Kerner

Charlotte, N.C., Nov. 12 - Exelon Corp., in addition to launching an unsolicited exchange offer for the outstanding shares of NRG Energy, Inc., will present a proposal at NRG's 2009 annual meeting to make changes to the company's board of directors.

NRG said Exelon, or its subsidiary Exelon Xchange Corp., plans to propose expanding NRG's 11-member board to up to 15 members and filling the resulting vacancies with Exelon nominees.

The directors to be elected at the meeting will constitute not less than 50% of the NRG board, according to an Exelon letter sent to NRG.

On Wednesday, Exelon began an exchange offer for all of the outstanding shares of NRG, at a fixed exchange ratio of 0.485 Exelon shares for each NRG share.

NRG's board of directors unanimously rejected an Oct. 19 unsolicited offer from Exelon to exchange each NRG share for 0.485 Exelon shares for a value of about $26.43 per share.

It was previously reported that Exelon, a Chicago-based electric company, filed a lawsuit in the Delaware Chancery Court against NRG and its directors alleging a breach of fiduciary duty by NRG's directors for reasons including the failure of the NRG directors to give appropriate consideration to, and take appropriate action on, the Oct. 19 proposal from Exelon.

In the lawsuit, Exelon seeks relief requiring the NRG board to exempt Exelon's exchange offer from the Delaware business combination statute and enjoining the board from taking any actions to frustrate the exchange offer.

NRG is a Princeton, N.J.-based power company.

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