|November 25, 2008, 4:55 pm|
Exelon Gets Nasty in Bid to Buy Out NRG
Posted by Tiernan Ray
It’s turning ugly in the battle between $34.5 billion (market cap) gas, electric and nuclear utility Exelon (EXC) and smaller NRG (NRG), which Exelon has been trying to acquire. Exelon offered to buy NRG on October 19 for $26.43 per share in an all-stock deal. NRG rejected the unsolicited bid on November 9, saying it was worth much more than Exelon was offering. Exelon came back with an appeal to NRG shareholders on Nov. 12 to turn in their shares in exchange for one half an Exelon share for each NRG share. NRG yesterday dismissed this latest move, saying the exchange ratio is no different than the original Exelon offer and was still undervaluing the company. Tonight, after the bell, Exelon’s chair and CEO John Rowe issued a blistering, “You have nowhere to run” memo to NRG’s shareholders, saying “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 … which will send a clear message that they want NRG to enter into a definitive agreement to create a company that will deliver substantial value for its investors. NRG’s response provides no economic alternative to Exelon’s offer for NRG shareholders, and, unfortunately, it brings nothing new to the table.” NRG Shares rose 6% today to $22.26, while Exelon rose 1.45% to $53.88.