NRG Energy Skeptical About Exelon's Synergy Claims In Bid

NRG Energy Inc. (NRG) Chief Executive David Crane said Wednesday he's skeptical about the size of cost savings and other synergies Exelon Corp. (EXC) estimates are possible in its hostile bid for the power generator.

"We have some reason to be skeptical," he said during a conference call.

Crane also questioned whether Exelon could raise $1.6 billion from power plant sales to finance the deal. He said Exelon may instead have to raise more equity than the $1.1 billion it has estimated.

NRG Energy Wednesday rejected Exelon's increased takeover offer, saying the $7.16 billion bid "continues to substantially undervalue" the electricity concern. The new offer was increased to 0.545 of an Exelon share for each NRG share, up from 0.485 of a share.

Crane said during the conference call the revised offer was a "modest bump" that falls "far short."

Exelon, after nearly eight months, boosted its takeover offer last week, calling it its final offer, after finding $1.5 billion in additional synergies.

Also Wednesday, NRG Energy highlighted the company's 2009 forecast for earnings before interest, taxes, depreciation and amortization of $2.5 billion, excluding items. The prior view was $2.18 billion. The power company increased the size of its share repurchase plan by 52% to $500 million, which it expects to complete by the end of the year.

A spokesman for Exelon did not immediately return a call seeking comment.

-By Mark Peters, Dow Jones Newswires; 212-416-2457; [e-mail]

(John Kell and Tess Stynes contributed to this report.)