Rio Tinto falls after BHP backs out; Exelon forges ahead with NRG bid; PNM clears step in gas sale

By Cristal Cody

New York, Nov. 25 - Wall Street found encouragement after the government said Tuesday it will provide $800 billion to get the credit markets moving again and several deals remain on target to close this year.

In M&A news Tuesday, Rio Tinto Ltd. shares plunged to a new low after rival mining giant BHP Billiton Ltd. pulled its $68 billion hostile takeover plan.

Also Tuesday, Exelon Corp. said that it has no plans to call a halt to its $6 billion hostile takeover attempt of NRG Energy Inc.

In other deal news, regulatory filings show that King Pharmaceuticals Inc. and Alpharma Inc. have a $60 million termination fee that must be paid if the merger has not closed by April 15.

Also on Tuesday, Constellation Energy said that shareholders will vote Dec. 23 on the $26.50 a share cash offer from MidAmerican Energy Holdings Co.

In other news, PNM Resources has cleared an initial review of the sale of its natural gas operations to New Mexico Gas Co.

Meanwhile, investors sent the Dow Jones Industrial Average up 36.08, or 0.43%, to 8,479.47, and the Standard & Poor's 500 up 5.58, or 0.66%, to 857.39 Tuesday.

The Nasdaq Composite Index, though, fell 7.29, or 0.50%, to 1,464.73.

Rio shares plunge after BHP backs out

Rio Tinto shares plunged 27.33% to set a new low Tuesday after rival mining giant BHP Billiton Ltd. pulled its $68 billion hostile takeover plan.

Rio shares closed at $106.09 in NYSE trading, down from a yearly high of $558.65.

BHP cited the slowing economy and lower commodity prices in backing out of the deal.

BHP Billiton shares rose 14.51% to close at $38.37 Tuesday.

BHP had pursued Rio Tinto since February for an all-stock deal that was then valued at $147 billion.

Rio and BHP are the world's second- and third-largest iron ore producers respectively.

Exelon not going away

Exelon said Tuesday that it will continue in its takeover attempt of NRG Energy.

NRG turned down Exelon's offer a second time on Monday and recommended stockholders not tender their shares.

"In light of NRG's continued refusal to discuss the merits of our offer, the NRG board clearly stands in the way of the opportunity Exelon is offering NRG investors to realize both immediate and long-term value for their shares," John Rowe, Exelon chairman and chief executive officer, said in a statement.

"We are determined to complete our proposed transaction and urge the NRG shareholders to speak strongly and convincingly to the NRG board by tendering their shares."

The exchange offer expires Jan. 6.

Exelon also said it has added J.P. Morgan Securities Inc. to its team of financial advisors, which also includes Barclays Capital Inc., Lazard Freres & Co. LLC, Loop Capital Markets, LLC, RBS Securities Corp. and UBS Securities LLC.

Exelon shares closed up 1.45% to $53.88.

NRG shares jumped 6% to close at $22.26.

King, Alpharma termination fee

According to filings with the U.S. Securities and Exchange Commission, the $60 million merger termination fee must be paid if the deal between King Pharmaceuticals and Alpharma has not closed by April 15.

King and Alpharma said Monday the boards of directors of both companies had agreed to King's increased $1.6 billion offer, up from the first bid of $1.4 billion offered in August.

The company will pay $37 a share in cash for Alpharma's outstanding Class A shares.

King is receiving financing to fund the deal from Credit Suisse Securities USA LLC, Credit Suisse's Cayman Islands Branch, Wachovia Capital Markets, LLC and Wachovia Bank, N.A., according to the SEC filing.

The closing is subject to antitrust review and approval from shareholders.

The merger is expected close by the end of December.

Alpharma shares fell 0.88% to close at $35.87 Tuesday.

King shares rose 1.61% to close at $9.45 in trading.

Constellation shareholders to vote Dec. 23

Constellation Energy said Tuesday that shareholders will vote Dec. 23 on MidAmerican Energy Holdings' cash offer.

Shareholders of record on Nov. 14 will be allowed to vote at the meeting.

"The continued deterioration in global credit and commodity markets leads us to conclude that combining with a well-capitalized strategic partner like MidAmerican is the best outcome for Constellation Energy and its shareholders," Mayo Shattuck III, chairman, president and chief executive officer of Constellation Energy, said in a statement.

The deal was first announced on Sept. 19.

The companies expect the merger to close in the second quarter of 2009.

Constellation shares fell 0.5% to close at $24.08 Tuesday, down from the $24.20 closing price on the last day of trading before the deal was announced and well off the 52-week high of $107.97.

PNM clears step in gas sale

A New Mexico Public Regulation Commission hearing examiner recommended a stipulation be approved that supports the $620 million sale of PNM Resources natural gas operations to New Mexico Gas Co., according to the order released Tuesday.

Objections must be made by Dec. 4 to the commission, which will consider the examiner's approval before making a final order on the sale.

PNM shares rose 6.01% to close at $9.70.

Investors pounce on LandAmerica stock

Bargain hunters came out for LandAmerica Financial Group Inc., sending the stock up 78.43% to 91 cents after an 88.25% drop a day earlier. The stock is still far beyond the 52-week high of $53.23.

The title insurer's shares fell after Fidelity National Financial Inc. withdrew its $126 million all-stock offer.

Fidelity shares rose 22.04% to close at $10.19 in trading Tuesday.

Mentioned in this article:

Alpharma Inc. NYSE: AL

BHP Billiton Ltd. NYSE: BHP

Constellation Energy NYSE: CEG

Exelon Corp. NYSE: EXC

Fidelity National Financial Inc. NYSE: FNF

King Pharmaceuticals Inc. NYSE: KG

LandAmerica Financial Group Inc. NYSE: LFG

NRG Energy Inc. NYSE: NRG

PNM Resources NYSE: PNM

Rio Tinto Ltd. NYSE: RTP

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