The U.S. Federal Energy Regulatory Commission approved Exelon Corp's hostile bid for independent power producer NRG Energy Inc on Thursday, even though NRG has rejected the deal.
– By Stephen Heiser –
FERC issued an order authorizing the proposed deal but said the approval "should not be construed as favoring or disfavoring" the Exelon bid.
NRG discounted the approval, noting that the deal would still need to receive support from the U.S. Department of Justice and the Nuclear Regulatory Commission, as well as several state regulators.
"The NRG board and management team continue to believe that Exelon's proposal significantly undervalues NRG and remains highly conditional," the company said in a statement.
Exelon hopes to coax NRG to the negotiating table over its unsolicited bid, which NRG has repeatedly said is too low.
Exelon, the largest nuclear power company in the United States, in October offered 0.485 of one of its shares for every NRG share. NRG shares are currently trading about 15 percent below that bid.
Shareholders holding around 51 percent of NRG's stock backed the deal earlier this year in a tender offer.
Exelon has said it would prefer to do a negotiated transaction with NRG, in part because a negotiated deal could avoid some refinancing requirements. Exelon has extended the tender offer until June.
The utility has also nominated a slate of directors to stand for election at NRG's annual meeting this year.
If the bid were to succeed, Exelon would have to sell some of its generation assets to mitigate market power concerns.
Exelon has said it would sell its three plants in Texas and transfer its power purchase agreements in the state to a third party. The company also said it would sell three plants currently owned by NRG in Delaware and Maryland.