Investor Karl Miller reaffirms support for Exelon's bid for NRG, election of director nominees

By Susanna Moo

Chicago, July 17 - Institutional investor Karl W. Miller said he is reaffirming support for Exelon Corp.'s bid to acquire NRG and the election of its director nominees.

NRG's advertised open letter to shareholders on July 16 offered no new or significant value creation to NRG shareholders other than attempts to explain lack of performance by the current management and board of directors, according to a press release issued by Miller's advisers.

"When you are explaining, you are losing at shareholder expense," the release said. "NRG shareholders have a unique opportunity that is rare in this market to create significant value by exercising control of the NRG board through their stock votes."

NRG's board of directors had "an excessive amount of time" to deliver a better price for the company to shareholders and have failed to do so, Miller said through his advisers. "No amount of explanation in the form of shareholder letters, proxy solicitation firm calls, or other materials will override the fact that Exelon is the only bona fide buyer at the table," he said.

Miller noted that NRG's board had a fiduciary obligation to disclose the names of potential buyers to NRG shareholders.

He then said NRG shareholders should vote for Exelon's director nominees based on the following:

• Exelon, as a regulated utility holding company, has superior access to capital markets in financial turmoil and is therefore better positioned to refinance, restructure and obtain new debt facilities for NRG current assets to facilitate growth;

• Exelon is better prepared to execute on considered and careful strategic planning as the industry moves into another era. NRG's current corporate structure was born out of a bankruptcy restructuring, not from a well thought-out strategic execution plan;

• Exelon has expertise in managing a large nuclear fleet of power plants and is best positioned to take advantage of any nuclear renaissance;

• Exelon will sell non-strategic NRG power generation assets and most likely dividend those proceeds to shareholders in the form of cash, in addition to stable regulated returns and annual dividends; and

• Exelon is prepared for the future as there will be energy shortages, increased fuel price volatility, and a marked need for new power generation.

Miller is an energy executive and institutional investor. He began his career on Wall Street during the 1980s and has an extensive background in banking, commodities trading and risk management, according to the release.

On July 2, Exelon said it was increasing its offer for NRG Energy, Inc. by 12.4%, to 0.545 of a share of Exelon common stock for each NRG share, from 0.485 of a share.

The total value of the revised offer to NRG shareholders was $3 billion, Exelon said.

According to Exelon, its latest offer takes into consideration about $1.5 billion of additional newly identified synergies as well as the value of NRG's recent acquisition of the Reliant Energy retail business.

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