Exelon's deal for NRG gets nuclear

Posted Jul 2nd 2009 3:45PM by Tom Taulli
Filed under: Industry

The dealmaking is heating up in the nuclear sector. Today, Exelon Corp (NYSE: EXC) upped its hostile bid by 12% for NRG Energy (NYSE: NRG). This new price tag translates into a valuation of $7.45 billion.

The wrangling between the companies has gone on for roughly eight months. In fact, hostile deals can be time-consuming (in some cases, lasting a couple years).

Something else: Exelon has indicated that this is the "best and final offer." Apparently, the company has realized new cost savings, which justifies the higher valuation.

And, the merger would definitely result in a powerhouse. In all, there would be rough 48,000 megawatts of power capacity.

Now, to push things, Exelon has nominated a new slate of directors for the upcoming shareholder meeting (on July 21st). The problem is that the initial premium on the buyout bid has diminished. Simply put, NRG has made some savvy moves to make itself more attractive, such as its purchase of Reliant Energy's (NYSE: RRI) retail business.

Tom Taulli is the author of various books, including The Complete M&A Handbook and the founder of BizEquity, a free online business valuation tool for small businesses. You can reach him at his personal blog.

Tags: exc, Exelon, inthenews, nrg, Reliant Energy, rri