NRG Energy and Reliant Energy remain mum about a report this week that NRG may buy Reliant's retail electric business, but that hasn't stopped analysts from discussing the pros, cons and possible motives for such a move.
According to SparkSpread.com, an online energy industry news site, senior NRG executives expressed interest in buying the Reliant business during an investor dinner at a financial conference in Phoenix last week. The report cited unidentified "market watchers."
NRG Energy Inc. said Wednesday that it has turned down Exelon Corp.'s revised hostile takeover bid of $8 billion in stock because it undervalues the business.
Last week Exelon, the nation's largest nuclear power company, sweetened its offer by about $1 billion because of newly identified cost savings and NRG's recent $287.5 million deal for Reliant Energy's Texas retail business.
In a letter to Exelon CEO John Rowe, Princeton-based NRG said it found the new bid was not in its shareholders' best interest but said it represented a "step in the right direction."
NRG said it is still open to any proposal that properly accounts for its "fundamental value and extraordinary growth prospects." Exelon, Chicago, previously said that its most recent bid was its "best and final offer."
"Defense Secretary Robert Gates said a treaty with Russia to cut long-range nuclear weapons on both sides will give the U.S. a clearer picture of its former Cold War adversary's arsenal.
The treaty allows for new verification standards, including access to each other's warheads for the first time, as Russia grows more reliant on nuclear forces for its defense, Gates told the Senate Foreign Relations Committee in Washington today. The U.S. and Russia hold 90 percent of the world's nuclear weapons.
"This treaty reduces the strategic nuclear forces of our two nations in a manner that strengthens the strategic stability of our relationship and protects the security of the American people and our allies," Gates said in the first hearing since President Barack Obama submitted the Strategic Arms Reduction Treaty to the Senate last week for ratification. "I am confident that it is the right agreement for today and for the future." "
