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PRINCETON, N.J. - NRG Energy Inc. said four proxy advisory firms recommended that their clients vote to re-elect NRG's incumbent nominees at its annual meeting for shareholders, a move that would cripple Exelon's hostile takeover bid, which the firms deem undervalued.
Last week NRG rejected Exelon's sweetened all-stock bid worth $8 billion, saying it was too low. Exelon, the nation's largest nuclear power company, had increased its offer by about $1 billion because of newly identified cost savings and NRG's recent $287.5 million deal for Reliant Energy's Texas retail business. Exelon raised its bid to 0.545 of a share for each NRG share, up from 0.485 of a share.
Both Exelon and NRG Energy have nominated a slate of directors for shareholders to vote on at NRG's annual meeting on July 21.
On Friday, Exelon urged NRG shareholders to vote in nine new independent directors to the NRG board, expanding the board and boosting chances for Exelon's takeover bid to go through. The outcome of that vote could ultimately determine if a sale happens or not. If the outcome doesn't swing in Exelon's favor, the company said it will walk away.
"We conclude that Exelon's current bid is not compelling enough to support splitting the board with nine dissident nominees," said advisory firm RiskMetrics in a report. Other advisory firms making similar recommendations included Proxy Governance Inc., Glass Lewis & Co. and Egan-Jones Proxy Services.
If NRG does work out a deal with Chicago-based Exelon, the new company would be the largest U.S. power generator, providing energy to about 45 million homes. A potential acquisition would also give Exelon gas generation and coal plants — assets that would be valuable even under pending emissions caps — and expand its presence in Texas, California and the Northeast.
Shares of Exelon closed at $49.53 on Monday. NRG shares closed at $23.63.
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