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NRG denies due diligence; Exelon committed to proxy contest
By Lisa Kerner
Charlotte, N.C., Jan. 20 - NRG Energy, Inc. president and chief executive officer David Crane believes that allowing Exelon Corp. to engage in due diligence would not sufficiently move Exelon's offer price for NRG, according to a form 8-K filed with the Securities and Exchange Commission.
Representatives of NRG, including Crane, met with Exelon to discuss Exelon's unsolicited tender offer for NRG, the filing said. No agreements were reached.
Exelon is offering to exchange 0.485 shares of its common stock for each NRG share. The offer was extended to Feb. 25 from Jan. 6, it was previously reported.
As of Jan. 7, 45.6% of NRG shares had been tendered, according to Exelon.
NRG's board of directors rejected the Chicago-based electric company's offer twice before the company brought the offer directly to NRG shareholders.
In a Jan. 20 letter to NRG employees, Crane said that Exelon's price for NRG remains too low and the proposed transaction is risky.
Exelon reiterated its intent to launch a proxy contest in connection with NRG's 2009 annual meeting, Crane said.
It was previously reported that Exelon or its subsidiary, Exelon Xchange Corp., planned to propose expanding the Princeton, N.J.-based power company's 11-member board to up to 15 members.
Crane acknowledged shareholder support for a fair-value transaction but said Exelon has no strategy for a combined company and simply wants to reduce NRG's debt in order to achieve better credit ratings, a prior news release said.
According to Crane, NRG is focused on "market discovery" regarding its options as a result of interest expressed by other companies.
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