Exelon increases all-stock offer in its bid to acquire NRG Energy

By Lisa Kerner

Charlotte, N.C., July 2 - Exelon Corp. said it is 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 is $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.

NRG said it will consider the proposal, which it has not yet received. The company's shareholders were advised not to take any action regarding their shares at this time, according to an NRG news release.

Exelon also announced it filed an investor presentation on Thursday with the Securities and Exchange Commission that will be used as part of the company's proxy solicitation for the election of nine new, independent directors to the NRG board.

Included in the presentation are details about Exelon's financing plan to maintain its investment-grade credit ratings while "optimizing long-term shareholder value."

Exelon believes it will be able to meet all financing needs associated with the transaction, including the refinancing of $4.7 billion of NRG's senior notes and other NRG debt while maintaining investment-grade credit ratings.

In June, NRG president and chief executive officer David Crane and chairman Howard Cosgrove urged stockholders to vote for the board's director nominees at the company's 2009 annual meeting on July 21.

The company nominated Cosgrove, John F. Chlebowski, William E. Hantke and Anne C. Schaumburg.

Exelon's exchange offer

In October 2008, Exelon, a Chicago-based electric company, proposed acquiring NRG at a fixed exchange ratio of 0.485 of a share of Exelon common stock for each share of NRG common stock.

Exelon said it brought the offer directly to NRG shareholders on Nov. 12, 2008 after the Princeton, N.J.-based power generation company twice rejected the offer.

As previously reported, Exelon extended its exchange offer for NRG to Aug. 21 due to NRG's delay in holding its annual meeting.

The exchange offer had been extended to June 26 from Feb. 25 to allow Exelon time to obtain regulatory approvals and to solicit proxies for the election of directors to NRG's board, according to Exelon.

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