Exelon will walk away if NRG shareholders do not elect new directors

By Angela McDaniels

Tacoma, Wash., July 15 - Exelon Corp. will abandon its efforts to acquire NRG Energy, Inc. if NRG shareholders elect no new directors at the annual meeting on Tuesday, according to an Exelon news release.

As previously reported, Exelon wants NRG shareholders to vote the blue proxy card to elect four independent candidates to run in opposition to incumbent directors, to expand the NRG board to 19 directors and to elect five independent candidates nominated to join the expanded board.

NRG has repeatedly rejected Exelon's offer to acquire the company and has advised its shareholders to do the same.

Exelon is offering 0.545 of a share of its common stock in exchange for each NRG share, which represents an increase of 12.4% over its original offer of 0.485 of an Exelon share. The exchange offer ends Aug. 21.

In a letter on Wednesday, Exelon chairman and chief executive officer John W. Rowe asked NRG shareholders to vote for Exelon's nine nominees, who can "open the door" to negotiations between NRG and Exelon.

According to Rowe, NRG chief executive officer David Crane has indicated that the election of four new directors would be viewed by NRG as a directive to sit down with Exelon and permit due diligence.

In Wednesday's letter, Rowe said Exelon is concerned that the election of only four new directors may not lead to meaningful discussions about a transaction and that if this is the outcome of the vote, Exelon will consider "very seriously" its next steps.

Shareholder expresses support

Institutional investor Karl W. Miller issued a statement on Wednesday expressing support for Exelon's bid to acquire NRG and the election of Exelon's director nominees.

"NRG's advertised support from proxy advisory firms is purely window dressing. The simple fact is that there are no other credible buyers for NRG other than Exelon," Miller said in the statement.

"The NRG board of directors has had an excessive amount of time to deliver a better price for the company to shareholders, which they have failed to do."

According to Miller, facts that favor the deal include Exelon's nuclear power plant experience, which positions it to "take advantage of any nuclear renaissance," and its status as a regulated utility holding company, giving it better access to capital with the capital markets in financial turmoil.

"Exelon is therefore better positioned to refinance, restructure and obtain new debt facilities for NRG current assets to facilitate growth," he said.

Exelon is a utility services holding company based in Chicago.

NRG Energy is a wholesale power generation company based in Princeton, N.J.

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