Peacock

12 November 2008 By Robert Cyran Follow @rob_cyran

The US utility s $6bn hostile offer for its rival appears shaky it has yet to line up financing. Yet NRG s defences aren t bulletproof either. Exelon may be trying to force a friendly deal and to put a cap on how much it has to lift its bid.

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Exelon has launched a hostile allstock exchange offer for NRG Energy. The US utility is offering 0.485 shares for each share of rival NRG. This is a 37% premium to NRG's closing price on October 17. At current market prices, the offer values NRG at $6bn.

Exelon also filed a lawsuit in Delaware against NRG's directors claiming they breached their fiduciary duty by not giving appropriate consideration to its offer.

NRG's board previously rejected Exelon's offer, saying it is opportunistic, presents financing risks and undervalues the company.

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