NRG rejects Exelon's revised offer, increases share repurchases

By Lisa Kerner

Charlotte, N.C., July 8 - NRG Energy, Inc. announced that its board of directors rejected Exelon Corp.'s latest offer for the company.

Last week Exelon increased its offer for NRG by 12.4% to 0.545 of a share of Exelon common stock for each NRG share from 0.485 of a share.

According to Exelon, the revised 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 Exelon's offer is not in the best interests of the company's stockholders but does represent "a step in the right direction."

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 brought the offer directly to NRG shareholders in November 2008 after the Princeton, N.J.-based power generation company twice rejected the offer.

The exchange offer will end on Aug. 21.

NRG ups share repurchase

The NRG board also announced that it increased the authorization for common share repurchases to $500 million from $330 million.

NRG said the increase was made in connection with the "overall improved financial outlook, higher cash flow from operations, and underlying strength of the company's liquidity position."

The company plans to resume its common share repurchases later this year.

NRG will try to complete the $500 million in buybacks by the end of 2009.

Exelon seeks board seats

As previously reported, Exelon filed an investor presentation with the Securities and Exchange Commission last week 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."

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.

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