Exelon raises bid for Texas Power Company

NRG is the second-biggest power producer in Texas. Exelon Corp. is the largest U.S. utility owner by market value and based in Chicago. Once upon a time, not long back, Exelon Corp proposed a takeover of NRG by swap 0.485 share of Exelon for each NRG share. The bid was rejected and ever since Exelon Corp has been working out the possibilities. Following this, Exelon took the offer directly to NRG shareholders and in June this year it nominated nine independent directors for board seats.

In a recent development, Exelon has increased the proposed bid to 0.545, a 12% increase. According to Exelon this is the best and their final offer. The hike was reasoned for identifying cost savings and accounting for NRD's purchase this year for RRI energy.

Expert, however, believe that the bid has been good if it were equal or above the 0.58 levels.

Exelon indicated that the earnings per share would increase by as much as 7 percent in 2012 and beyond. The company expect cost savings of around $475 million including $20 million at the Texas retail unit and a 30 percent reduction in operations and maintenance costs at NRG.

NRG is was selected by the U.S. Energy Department for government loan guarantees to back new nuclear plants but Exelon do not have any plans of a nuclear plant.

The bidding and takeover process is always interesting. Lets see what turns out in this case.