UPDATED: Exelon Corp., Chicago, which owns Peco Energy, Philadelphia, bids $6.2B for NRG Corp., Houston, in an unsolicited offer attempting to exploit the depressed stock market and boost its status as a power industry giant. News release here. Investor presentation 11 AM TODAY here.
NRG says it'll review the offer. Release here.
Exelon's offer is "strategically sound" but will likely hurt the company's credit rating and drive up potential borrowing costs, says credit analyst Philip C. Adams of Gimme Credit LLC.
Does this mean the stock market has bottomed? When share prices drop, the bargain-hunters come forth. If deals get done, prices can start to rise again.
Is this deal good for America? Exelon is already the nation's largest nuclear power provider, and CEO John Rowe is counting on demand and profits to surge as oil prices stay high.
It's the "second attempted nuclear power acquisition in North America in five weeks as asset prices tumble amid the credit freeze. Exelon is taking advantage of a 55 percent drop in NRG's shares since July 1. The offer follows Warren Buffett's MidAmerican Energy Holdings Co. buying Constellation Energy Group Inc. for $4.7 billion on Sept. 18, less than half its market value prior to last month's slump. Buffett has also invested in NRG," writes Bloomberg News.
"Accquiring NRG the second-biggest electricity generator in Texas, would give Exelon nuclear reactors outside its Illinois and Pennsylvania operating bases. Demand for nuclear power is rising, driven by oil price volatility and government pledges to reduce greenhouse-gas emissions." Story here.