NRG Energy Skeptical About Exelon's Synergy Claims In Bid
July 08 2009 - 9:20AM
Dow Jones News
NRG Energy Inc. (NRG) Chief Executive David Crane said Wednesday
he's skeptical about the size of cost savings and other synergies
Exelon Corp. (EXC) estimates are possible in its hostile bid for
the power generator.
"We have some reason to be skeptical," he said during a
conference call.
Crane also questioned whether Exelon could raise $1.6 billion
from power plant sales to finance the deal. He said Exelon may
instead have to raise more equity than the $1.1 billion it has
estimated.
NRG Energy Wednesday rejected Exelon's increased takeover offer,
saying the $7.16 billion bid "continues to substantially
undervalue" the electricity concern. The new offer was increased to
0.545 of an Exelon share for each NRG share, up from 0.485 of a
share.
Crane said during the conference call the revised offer was a
"modest bump" that falls "far short."
Exelon, after nearly eight months, boosted its takeover offer
last week, calling it its final offer, after finding $1.5 billion
in additional synergies.
Also Wednesday, NRG Energy highlighted the company's 2009
forecast for earnings before interest, taxes, depreciation and
amortization of $2.5 billion, excluding items. The prior view was
$2.18 billion. The power company increased the size of its share
repurchase plan by 52% to $500 million, which it expects to
complete by the end of the year.
A spokesman for Exelon did not immediately return a call seeking
comment.
-By Mark Peters, Dow Jones Newswires; 212-416-2457;
mark.peters@dowjones.com
(John Kell and Tess Stynes contributed to this report.)