Exelon raises bid for NRG Energy to $8 billion

Exelon Corp. said Thursday it raised its hostile takeover bid for rival NRG Energy Inc. to about $8 billion in stock, citing newly identified cost savings and NRG's acquisition of Reliant Energy's Texas retail business .

Exelon CEO John Rowe said in a statement that this is its "best and final offer." Both Exelon and NRG Energy have nominated a slate of directors for shareholders to vote on at NRG's annual meeting on July 21. The outcome of that vote could ultimately determine if the sale goes through.

Chicago-based Exelon is urging NRG shareholders to vote for nine new independent directors.

Exelon first offered to buy NRG in October, but its previous offers have been rejected. It is now offering to exchange 0.545 shares of its own stock for each NRG share, up 12.4 percent from its initial offer of 0.485 shares. Exelon said it increased the bid because it found an additional $1.5 billion in potential savings from the tie-up, and because of NRG's recent acquisition of Reliant Energy's retail business. The deal had been valued at about $5 billion.

Princeton, N.J.-based NRG has repeatedly said the old offer undervalues the company.

If NRG combines with Chicago-based Exelon, the new company would be the largest U.S. power generator, providing energy to about 45 million homes.

Exelon said Thursday that its is "confident" the company can meet all financing needs associated with the transaction, including refinancing of $4.7 billion of NRG's senior notes and other NRG debt, while maintaining its investment-grade credit ratings.

Last month, Exelon said it plans to layoff 500 employees and will take a $40 million severance charge in the second quarter as part of a massive restructuring plan aimed at cutting costs. The move is expected to save Exelon about $350 million.

Exelon shares closed Wednesday at $51.56, while NRG shares finished at $26.05.