DealZone

NRG CEO: Road map to double-digit increase

July 8, 2009

NRG CEO David CraneNRG Chief Executive David Crane, talking to Reuters after his company rejected Exelon’s latest hostile bid for the company,¬†declined to specify how high Exelon would need to bid to bring NRG to the table. But he did say that his company has provided “a road map for 3 different ways they can get to double digit increases” in their bid.

Here are some other highlights from the interview that didn’t make it into the story:

ON EXELON’S NEW SYNERGY ESTIMATES

“If you’re only going to give our shareholders 18 percent of those synergies, that’s not so exciting. In most combinations, the synergies (are divided) more in the 50-50 range of whatever number… They claim there are like $3.2 billion of synergies. This is not a gotcha game. I’m not saying let me sit down with you and if you only prove $3 billion, I’ll say ‘Aha! You’re $200 million short.’ Fifty percent of $3 billion is much more than 18 percent of $3.2 billion.”

ON EXELON’S “BEST AND FINAL OFFER”

“What makes this deal unusual is that this is all a negotiation that is occurring in public. People making best and final offers and then coming back happens all the time in private negotiations.”

ON EXELON PLANS TO CUT NRG JOBS

“We have made it clear to every employee that this is a consolidating industry, we have a fiduciary duty to NRG shareholders, and that there is not a guarantee of permanent employment. Having said that … I definitely have concern about value creation tied with elimination of NRG jobs. People are not all fungible. The people that have created all this value at NRG and the people that are currently creating value in terms of the nuclear development and things like that are the very people that Exelon proposes to wipe out. You really can’t have it both ways. You can’t have full cost synergies by wiping out all of NRG’s corporate capabilities, but then say you’re going to take advantage of NRG’s growth opportunities. The people are the ones creating the growth opportunities and Exelon has a different type of person working there than the type of person working at NRG.”

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