NEW YORK, Nov 9 (Reuters) - Power producer NRG Energy Inc on Sunday rejected an unsolicited $6.08 billion takeover offer from utility owner Exelon Corp, saying the offer 'significantly undervalues' the company.
NRG also said that despite its current rejection, it was ready to do a deal under more favorable terms. Such a merger would create the largest U.S. power producer.
The offer 'significantly undervalues NRG and is not in the best interests of NRG's shareholders,' NRG said in a statement on Sunday. 'The Board thoroughly reviewed Exelon's proposal and reached its decision after careful consideration with its independent financial and legal advisers.'
Exelon unveiled its all-stock bid on Oct. 19, offering to pay 0.485 Exelon share for each NRG share, equal to about $27.82 a share at current prices.
The offer, which came after NRG lost half of its market value in two months, reflected a 37-percent premium over NRG's closing share price on the day before the bid was made public.
In a letter to Exelon Chief Executive Officer John Rowe, NRG CEO David Crane and Chairman Howard Cosgrove cited a lack of secured financing as another reason for the rejection, posing 'real risk of non consummation to NRG's shareholders.'
But the company remains open to a deal at the right price.
'Please be assured that NRG is a believer in industry consolidation and has and always will be a willing seller or buyer when genuine value can be created for both parties,' NRG said in the letter.
(Editing by Maureen Bavdek)
(Reporting by Jui Chakravorty Das; 646-223-6033)
Keywords: NRG EXELON/
COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NRG also said that despite its current rejection, it was ready to do a deal under more favorable terms. Such a merger would create the largest U.S. power producer.
The offer 'significantly undervalues NRG and is not in the best interests of NRG's shareholders,' NRG said in a statement on Sunday. 'The Board thoroughly reviewed Exelon's proposal and reached its decision after careful consideration with its independent financial and legal advisers.'
Exelon unveiled its all-stock bid on Oct. 19, offering to pay 0.485 Exelon share for each NRG share, equal to about $27.82 a share at current prices.
The offer, which came after NRG lost half of its market value in two months, reflected a 37-percent premium over NRG's closing share price on the day before the bid was made public.
In a letter to Exelon Chief Executive Officer John Rowe, NRG CEO David Crane and Chairman Howard Cosgrove cited a lack of secured financing as another reason for the rejection, posing 'real risk of non consummation to NRG's shareholders.'
But the company remains open to a deal at the right price.
'Please be assured that NRG is a believer in industry consolidation and has and always will be a willing seller or buyer when genuine value can be created for both parties,' NRG said in the letter.
(Editing by Maureen Bavdek)
(Reporting by Jui Chakravorty Das; 646-223-6033)
Keywords: NRG EXELON/
COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.