Exelon Corp.'s efforts to ease a hostile takeover of NRG Energy Inc. into a negotiated merger failed when executives of the target company declined to open its books, according to regulatory filings Tuesday.
Exelon Chairman and Chief Executive John Rowe asked to review NRG's financials before considering increasing its bid of 0.485 shares for each share of Princeton, N.J.-based NRG. The deal is valued at $5.83 billion.
Officials from both companies met Monday in Washington after 45.6 percent of NRG shareholders agreed on Jan. 6 to tender their stock to Chicago-based Exelon, according to Tuesday filings with the Securities and Exchange Commission.
NRG CEO David Crane said he didn't believe that opening the books would result in Exelon raising its bid to an acceptable price. Rowe acknowledged that any increase would be small. Despite Exelon's strong showing in the tender offer, the proposed merger still is not a sure thing, said Neel Mitra, an analyst for Simmons & Co. International. The results of the tender are "kind of artificial because NRG shareholders are allowed to trade their shares back before the deal closes or the regulatory approvals are complete," Mitra said.
The combination of Exelon and NRG would form the nation's largest power-generation company. The NRG board rejected in November the same offer that Exelon later proposed to NRG shareholders. Exelon's tender offer has been extended to Feb. 25.
If Exelon controls a majority of NRG stock, it could vote in a supportive board at NRG's annual meeting in May. NRG says other unnamed companies are interested in merging, according to Exelon's latest filing.
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Exelon Chairman and Chief Executive John Rowe asked to review NRG's financials before considering increasing its bid of 0.485 shares for each share of Princeton, N.J.-based NRG. The deal is valued at $5.83 billion.
Officials from both companies met Monday in Washington after 45.6 percent of NRG shareholders agreed on Jan. 6 to tender their stock to Chicago-based Exelon, according to Tuesday filings with the Securities and Exchange Commission.
NRG CEO David Crane said he didn't believe that opening the books would result in Exelon raising its bid to an acceptable price. Rowe acknowledged that any increase would be small. Despite Exelon's strong showing in the tender offer, the proposed merger still is not a sure thing, said Neel Mitra, an analyst for Simmons & Co. International. The results of the tender are "kind of artificial because NRG shareholders are allowed to trade their shares back before the deal closes or the regulatory approvals are complete," Mitra said.
The combination of Exelon and NRG would form the nation's largest power-generation company. The NRG board rejected in November the same offer that Exelon later proposed to NRG shareholders. Exelon's tender offer has been extended to Feb. 25.
If Exelon controls a majority of NRG stock, it could vote in a supportive board at NRG's annual meeting in May. NRG says other unnamed companies are interested in merging, according to Exelon's latest filing.
Stephen Pierce is offering his book "Make Real Money on the Internet" absolutely free!!!!!! Get your copy today!!
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