Exelon walks away from $7.4 billion bid for NRG
Exelon scuttles $7.4 billion bid for NRG after shareholders block board coup
By Mark Williams, AP Energy Writer
On Tuesday July 21, 2009, 11:46 am EDT


COLUMBUS, Ohio (AP) -- Exelon said Tuesday it has ended its $7.4 billion, all-stock bid for power generator NRG Energy.

Chicago-based Exelon Corp. withdrew its offer shortly after NRG shareholders rejected a proposal that would have expanded NRG's board, preferably with new and existing seats going to people that would support the takeover. Princeton, N.J.-based NRG has rejected two offers for the company from Exelon, calling them undervalued.

The deal would have created the nation's largest power generator, a company big enough to provide electricity to about 45 million homes.

NRG said a preliminary vote count at its annual meeting showed shareholders voting to re-elect the company's nominees to the board over a slate of nominees from Exelon. At the same time, they also rejected Exelon's bid to expand the board and fill the five spots with its nominees.

NRG did not release a vote count. It said final results will be released in August.

"NRG stockholders understood that this vote was all about value and they voted overwhelmingly to send a message that Exelon's current offer was unfair to NRG stockholders," David Crane, president and CEO, said in a statement.

Crane said the company will continue to evaluate offers from Exelon and any other company.

Exelon said in a statement that after bidding twice for NRG, it was unwilling to sweeten its offer again.

"NRG shareholders have spoken, and Exelon will move on," said John Rowe, Exelon's chairman and CEO.

The share prices of both companies move 2 percent higher on the vote. NRG shares rose 53 cents to $24.08 and Exelon shares rose $1.08 to $53.13.

Exelon made its initial offer of .485 shares for each NRG share in October at a time when the declining stock market had whacked NRG's shares. Exelon raised the offer by 12 percent to .545 shares earlier this month.

Exelon, with nearly $19 billion in annual revenue, has 5.4 million electric customers in northern Illinois and Pennsylvania. It also has 480,000 natural gas customers in the Philadelphia area.

NRG's power plants have 24,000 megawatts of generation capacity, enough to supply more than 20 million homes. Its retail business, Reliant Energy, serves more than 1.7 million residential, business, commercial and industrial customers in Texas.