NRG Energy continues to reject Exelon's exchange offer

By Lisa Kerner

Charlotte, N.C., Nov. 24 - NRG Energy, Inc. said its board of directors unanimously rejected Exelon Corp.'s unsolicited proposal to exchange 0.485 of its shares for each share of NRG stock.

The board recommended that NRG shareholders not tender their shares in the offer, noting that the exchange ratio is the same as in Exelon's original Oct. 19 offer, which the board also rejected.

NRG chairman of the board Howard Cosgrove said Exelon's offer is "inadequate" and "dilutive" and it "significantly undervalues NRG and does not fully reflect the underlying fundamental value of NRG's assets, operations and strategic plan."

"While NRG believes in consolidation, we are not advocates for pursuing scale for scale's sake," Cosgrove added.

It was previously reported that in addition to launching an unsolicited exchange offer for the outstanding shares of NRG, Exelon or its subsidiary, Exelon Xchange Corp., planned to propose expanding the Princeton, N.J.-based power company's 11-member board to up to 15 members and filling the resulting vacancies with Exelon nominees.

Exelon, a Chicago-based electric company, also 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.

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