US court rejects NRG's Exelon claims
NRG Energy's lawsuit alleging that Exelon Corporation had no intention of completing its exchange offer for the company has been rejected by a US court.
NRG Energy's lawsuit alleging that Exelon Corporation had no intention of completing its exchange offer for the company has been rejected by a US court.
In a court order dated 19 June, the US District Court for the Southern District of New York rejected NRG's claim that Exelon did not intend to complete the exchange offer and entered judgement in favour of Exelon, the company has said. The court ruled that the allegations in the suit filed by NRG in March 2009 were without merit.
Exelon initially placed its offer for NRG as NRG's stock slumped in October 2008, but its overtures have twice been rejected by NRG, prompting Exelon to make its offer directly to NRG shareholders. If successful, the takeover bid would result in the largest power firm in the USA with 47,000 MWe of generation capacity, including 18,000 MWe from nuclear power plants.
NRG's board has consistently voiced its opposition to Exelon's bid on the grounds that Exelon's offer undervalues the company. Only two days before the court ruling, NRG issued a press release saying that it continued to view Exelon's "highly conditional proposal as inadequate due to a number of factors".
Unsurprisingly, Exelon begs to differ with NRG's view. "Despite NRG's many attempts to obstruct Exelon's offer, Exelon remains committed to a combination with NRG that delivers value for shareholders of both companies," Exelon executive vice president William Von Hoene said following the court ruling. Exelon recently appealed to NRG stockholders to support changes to the NRG board.
Exelon, one of the world's largest nuclear utilities, recently announced that it would be making 500 staff redundant and introducing spending reductions across the group in an attempt to cut $350 million from next year's costs.
