Exelon to extend NRG offer; W.R. Berkley may be shopping; several deals get shareholder approval

By Cristal Cody

New York, Dec. 23 - Exelon Corp. said Tuesday that it will extend its takeover offer for NRG Energy Inc. beyond the Jan. 6 deadline, but a market source said Exelon may have to raise its offer to be taken seriously.

In other activity, while W. R. Berkley Corp. terminated negotiations for a small acquisition, the company has plenty of buying opportunities, an analyst told Prospect News.

Meanwhile, Christmas came early for some companies as shareholders gave the go-ahead to several deals Tuesday.

Shareholders also approved two bank acquisitions brought about by the credit crisis and government bailout aid.

Otherwise on Wall Street, bleak economic reports kept the Dow Jones Industrial Average down a fifth straight day. The Dow lost 100.28 points, or 1.18%, to 8,419.49.

The Standard & Poor's 500 index also fell 8.47, or 0.97%, to 863.16, and the Nasdaq Composite index fell 10.81, or 0.71%, to 1,521.54.

Exelon holdover

Exelon said in a regulatory filing with the Securities and Exchange Commission on Tuesday that it will extend the offer for NRG because it will not receive regulatory or shareholder approval by the tender deadline.

The nuclear power company needs merger approval from the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the Pennsylvania Public Utility Commission, the New York Public Service Commission, the California Energy Commission, the California Public Utilities Commission and the Public Utility Commission of Texas, according to the filing.

Exelon's stock offer values NRG Energy at about $5.8 billion.

After NRG's board turned down Exelon's offer of a fixed exchange ratio of 0.485 of an Exelon share for each NRG share, the company took the offer to shareholders on Nov. 12.

The bid was a premium of $7.10, a 37%, a share to NRG's closing stock price on Oct. 17 before the proposal was made public. Share prices have spiked since then, and as of Monday, the offer represented a premium of $3.98, or 19%, a share.

Exelon has the ability to raise its bid, a market analyst told Prospect News.

"The question is whether they will do it to meet their end objective, and that's a whole different story," the analyst said.

NRG shares fell 55 cents, or 2.63%, to close Tuesday at $20.40.

Exelon's stock rose 22 cents, or 0.43%, to end the day at $51.63.

Berkley looking for deals

W. R. Berkley said Tuesday that it terminated negotiations to acquire Norway-based NEMI Forsikring ASA.

"W. R. Berkley Corp. devoted substantial time and resources in performing its due diligence investigation, but was unable to structure an appropriate transaction," the company said in a statement.

The deal was first announced on Nov. 11.

W.R. Berkley, an insurance holding company based in Greenwich, Conn., has not released any specific terms.

Doug Mewhirter, an associate analyst with RBC Capital Markets, said the transaction's structure probably had a lot to do with the termination, but the company could still be in the market for deals.

"W.R. Berkley has a lot of opportunities in the marketplace," Mewhirter said. "They've been hiring new underwriters and made a couple more acquisitions. It sounds like they're willing to walk away and look for more opportunities. If this company is still on the market six months from now, maybe they will take another stab at it."

Shares of Berkley fell 33 cents, or 1.09%, to close Tuesday at $29.99, near the stock's 52-week high of $31.26.

Bank mergers get nod

PNC Financial Services Group Inc. and National City Corp. shareholders approved PNC's $5.6 billion acquisition of the Cleveland-based bank, with a little help from Uncle Sam's bailout program.

PNC shares rose 33 cents, or 0.77%, to close at $43.01, while National City rose 4 cents, or 2.48%, to close at $1.65.

Wells Fargo & Co. and Wachovia Corp. shareholders also approved Wells Fargo's $11.8 billion buyout of the Charlotte, N.C.-based Wachovia.

Wachovia shares fell 15 cents, or 2.75%, to close at $5.30 Tuesday.

Wells Fargo shares slipped 43 cents, or 1.57%, to close at $26.99.

Both bank deals are expected to close by Dec. 31.

In other shareholder meetings on Tuesday, stockholders of U.S. oil drilling company Grey Wolf Inc. approved the $2 billion cash and stock acquisition by Precision Drilling Trust of Canada.

Grey Wolf's stock climbed 27 cents, or 8.6%, to close at $3.41.

Precision Drilling shares rose 17 cents, or 2.38%, to close at $7.32.

Mentioned in this article:

Exelon Corp. NYSE: EXC

Grey Wolf Inc. AMEX: GW

National City Corp. NYSE: NCC

NRG Energy Inc. NYSE: NRG

PNC Financial Services Group Inc. NYSE: PNC

Precision Drilling Trust NYSE: PDS

Wachovia Corp. NYSE: WB

Wells Fargo & Co. NYSE: WFC

W. R. Berkley Corp. NYSE: WRB

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