UPDATE:US Judge Dismisses NRG Suit Vs Exelon Over Disclosure
22 Junho 2009 - 4:30PM
Dow Jones News
A federal judge dismissed a lawsuit filed by NRG Energy Inc.
(NRG) against Exelon Corp. (EXC), saying NRG failed to prove Exelon
made false statements in its ongoing offer for the merchant power
generator.
Exelon last fall launched a hostile bid for NRG Energy, offering
to pay a fixed ratio of 0.485 Exelon share for each NRG share in a
bid to create the largest power generator in the U.S. by output.
NRG Energy's board has stiffly resisted the bid, saying it
undervalues the power-plant operator.
In its effort to fight off Exelon's bid, now worth around $6.4
billion, NRG filed a lawsuit in U.S. District Court in New York
City in March, claiming Exelon's offer was misleading. NRG Energy
contends Exelon doesn't plan to follow through on its exchange
offer unless it reaches a negotiated deal and requested the court
force Exelon to disclose these plans. Exelon denied the claim,
saying it will complete the deal without the support of NRG
Energy's board as long as certain conditions are met. A two-day
trial on the case was held earlier this month.
U.S. District Judge John Koeltl in a ruling signed Friday found
NRG Energy failed to prove Exelon made a false statement or
material omission in its exchange offer. The judge added NRG Energy
is free to make its case to shareholders.
"Exelon has made clear that it would prefer to arrive at a
negotiated transaction but that is not inconsistent with an intent
to close the exchange offer if NRG is unwilling to enter into a
negotiated transaction," Koeltl wrote.
NRG Energy is scheduled to hold its annual meeting on July 21.
Exelon is proposing at the meeting to expand NRG Energy's board and
add its own members as it tries to complete the deal amid the
resistance of NRG's current board.
NRG Energy in a statement Monday said the ruling doesn't change
the key issue for shareholders, which is Exelon's refusal to offer
an appropriate value for the company. Officials at Exelon had no
immediate comment on the ruling.
Exelon has been under growing pressure to raise its offer for
NRG Energy as shares of NRG trade near the exchange offer and as
support among NRG shareholders wanes. Exelon's board is scheduled
to meet June 30 to assess its bid.
Shares of Exelon recently traded down 1.2% to $49.34, while NRG
Energy was down 2.4% at $23.25. As of Friday's market close, the
proposed deal represented less than a 2% premium for NRG Energy
shareholders. The exchange offer represented a 37% premium for NRG
Energy shareholders when Exelon announced its bid in October.
-By Mark Peters, Dow Jones Newswires; 212-416-2457;
mark.peters@dowjones.com