DealZone

‘Tis the season for unbridgeable gaps.

NRG Energy rejected Exelon’s sweetened (and hostile) bid on Wednesday, saying the $6.9 billion offer was still too low.   

Exelon raised its all-stock offer for NRG by more than 12 percent last week, but investors have not been swayed by the increased price. NRG shares have lost more than 15 percent of their value since Exelon bumped up its bid.   

Exelon has said its increased bid of 0.545 of its shares for every NRG share is its best and final offer. 
Still, NRG called the revised Exelon bid a step in the right direction.  “If you would properly recognize the value created by NRG itself, you would be able to increase your current 0.545 offer by a substantial amount,” NRG wrote in its letter.   

Next stop on this long road: NRG’s annual meeting on July 21. Exelon has nominated a slate of directors to stand for election; shareholders will vote.

The two companies are part of a long list of running hostiles, including Broadcom/Emulex, Agirum/CF/Terra, Xstrata/Anglo American, Validus/IPC and EMC/Data Domain. Some of those offers are “unsolicited” and not “hostile” yet. But let’s face it — a bid that is unsolicited and perceived to be undervalued might not be “hostile,” but it isn’t considered particularly friendly.

Hostile deals – and there are a few going on – have one unintended consequence: too many press releases.

Every side feels compelled to correct a rival’s spin as things heat up, which means almost every press statement has an equal and opposite reaction.

In Bermuda, a three-way battle between IPC, Validus and Max Capital flooded the wires for weeks with innumerable press releases, as each side tried to make a case for why their deal was better. (Shareholders voted down an IPC-Max deal, but the fight is not over yet.)

Bermuda firms Max Capital Group and IPC Holdings are trying to fend off a hostile bid from rival Validus Holdings in what has turned into a very public battle on a small island involving litigation, proxy solicitations, and, indeed, volleys of press releases. 

As a shareholder meeting is set for next month to vote on the IPC-Max deal, Max CEO Marston Becker and IPC Chairman Kenneth Hammond sat down with Reuters to explain their position. 

An interview is in the works. But meanwhile, here is what we could not get an answer for – and not for lack of trying – during the interview in Manhattan: What would Max do if shareholders turn down the deal next month?