DEFA14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
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Preliminary Proxy Statement |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
NRG Energy, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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NRG Energys Board of Directors Rejects
Exelon Corporations Revised Unsolicited Proposal
PRINCETON, NJ; July 8, 2009NRG Energy, Inc. (NYSE: NRG) today announced that its Board of
Directors has unanimously determined that the July 2, 2009 revised unsolicited proposal from Exelon
Corporation (NYSE: EXC) significantly undervalues NRG and is not in the best interests of NRGs
stockholders.
Accordingly, today, the following official response was sent to Exelon Chairman and CEO, John Rowe:
July 8, 2009
Mr. John W. Rowe
Chairman and CEO
Exelon Corporation
P.O. Box 805398
Chicago, IL 60680-5398
Dear Mr. Rowe:
The Board of Directors of NRG Energy, Inc., in consultation with its financial and legal advisors,
has thoroughly reviewed and considered your revised offer, as detailed in your July 2nd
news release, which as of yesterdays close represented $27 per NRG Share. The Board unanimously
has rejected your proposal as it determined that the revised offer is not in the best interest of
NRG stockholders in that it continues to substantially undervalue NRG. Indeed, by any objective
analysis, the increase in your offer fails to adequately compensate NRG stockholders even for the
value created by NRG since your original offer was launched. The Board also rejected this proposal
due to the revised offers extraordinary conditionality which remains unchanged from Exelons
original offer made last fall.
While your revised offer is not acceptable as is, it certainly represents a step in the right
direction and is a welcome development after more than eight months of the 0.485 offer. The fact
that you were able to increase your offer largely through over $200 million per year of newfound
synergies identified by your consultants leaves open the possibility that, 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.
To reiterate, these value creating actions by NRG include, but are not limited to, the following:
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NRGs Reliant Energy AcquisitionWorth $4.50 Per Share in Value: |
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Your economists ascribed less than $1 per share to the value of Reliant Energy. You will note
from NRGs revised guidance for 2009, we expect Reliants adjusted earnings per share to
approach $1 per NRG share just in the last eight months of 2009. Reliant Energys contribution
to NRGs adjusted EBITDA over the same period is expected to be over $400 million. The robust
countercyclical earnings power of Reliants retail franchise is just one of several reasons why
the Reliant acquisition is worth significantly more than $1 per NRG share. We are confident,
based solely on the earnings guidance released today, that Exelons economists will see it the
same way. |
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NRGs Unique Position in Leading the Nuclear Renaissance: |
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In your most recent investor presentation, you explicitly ascribe zero value to NRGs nuclear
development program. Yet Exelon has spent tens of millions of dollars over the past two years
attempting to develop a greenfield nuclear plant in neighboring Victoria County. Surely Exelon,
more than most, is in a position to appreciate and properly value our nuclear position in Texas,
at the NRC and in the DOE loan guarantee program. |
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NRGs Repowering Initiative Advances Low and No Carbon Technologies: |
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Cedar Bayou unit 4, NRGs new 550 megawatt combined cycle plant in ERCOTs Houston Zone, our new
wind farms, GenConn and eSolar are just the current lead projects in RepoweringNRG and are
representative of low carbon, asset-based EBITDA growth of a kind that is absent from the Exelon
portfolio. |
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NRGs Significant Cost and Performance Improvements: |
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Since 2005, NRG has executed on its FORNRG initiatives NRGs Companywide, multi-year
initiative to increase the return on invested capital (ROIC) through operational performance
improvements. This project has seen considerable success with over $150 million of after-tax
savings through December 2008 and planned after-tax savings that we expect to result in
approximately $300 million of annual additional recurring free cash flow improvements by 2012. |
These value enhancing developments add to NRGs financial strength which your revised offer does
not yet appreciate or properly value. NRG is a Company that is on track to produce annual EBITDA
for 2009 of $2.5 billion, which represents a compound annual growth rate in EBITDA over the past
six years of 21% with a recurring free cash flow yield of 23%. It is the unanimously held view of
NRGs Board of Directors that such a company is worth significantly more than the $27 per share
that your July 2nd offer represents.
As we told you when we first met last September, NRG is open to any proposal that properly reflects
NRGs fundamental value and extraordinary growth prospects. If you wish to pursue a possible
combination with NRG in a more cooperative fashion, you should increase your July 2nd
offer by an amount that properly reflects the specific value of the NRG initiatives, especially in
light of the additional information provided today. Our management team then would be pleased to
sit down with you or your economists and consultants to validate and quantify the combination
synergies summarized in your July 2nd presentation and to demonstrate further the full
value of NRGs exceptional operating franchise and its unique growth initiatives so that Exelon
could provide a reasonable measure of that value to NRGs stockholders.
Sincerely,
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/s/ David Crane
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/s/ Howard Cosgrove |
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David Crane
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Howard Cosgrove |
President and Chief Executive Officer
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Chairman of the Board |
cc: Board of Directors of Exelon Corporation, c/o Corporate Secretary, Exelon Corporation
Conference Call
NRG will host a conference call on Wednesday, July 8, 2009 at 8:00 a.m. eastern. Investors, the
news media and others may access the call by dialing 866.831.6162 (toll-free) or 617.213.8852
(international). The participant passcode is 29296339. A slide presentation and live audio webcast
will be available at http://www.nrgenergy.com under the Investors section from the menu at the
top of the page. The webcast will be archived on the Companys website for those who are unable to
listen in real time. Participants should plan to dial in or log on approximately five minutes prior
to the scheduled start time.
About NRG
NRG Energy, Inc., a Fortune 500 company, owns and operates one of the countrys largest and most
diverse power generation portfolios. Headquartered in Princeton, NJ, the Companys power plants
provide more than 24,000 megawatts of generation capacityenough to supply more than 20 million
homes. NRGs retail business, Reliant Energy, serves more than 1.7 million residential, business,
commercial and industrial customers in Texas. A past recipient of the energy industrys highest
honorsPlatts Industry Leadership and Energy Company of the Year awards, NRG is a member of the
U.S. Climate Action Partnership (USCAP), a group of business and environmental organizations
calling for mandatory legislation to reduce greenhouse gas emissions. More information is available
at www.nrgenergy.com.
Important Information
In connection with its 2009 Annual Meeting of Stockholders (the 2009 Annual Meeting), NRG Energy,
Inc. (NRG) has filed a definitive proxy statement on Schedule 14A with the Securities and
Exchange Commission (the SEC). INVESTORS AND STOCKHOLDERS OF NRG ARE URGED TO READ THE PROXY
STATEMENT FOR THE 2009 ANNUAL MEETING IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION. In
response to the exchange offer proposed by Exelon Corporation referred to in this communication,
NRG has filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9. STOCKHOLDERS
OF NRG ARE ADVISED TO READ NRGS SOLICITATION/
RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT
INFORMATION. This communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities of NRG.
Investors and stockholders will be able to obtain free copies of NRGs definitive proxy statement,
the Solicitation/Recommendation Statement on Schedule 14D-9, any amendments or supplements to the
proxy statement and/or the Schedule 14D-9, any other documents filed by NRG in connection with the
2009 Annual Meeting and/or the exchange offer by Exelon Corporation, and other documents filed with
the SEC by NRG at the SECs website at www.sec.gov. Free copies of the definitive proxy statement,
the Solicitation/ Recommendation Statement on Schedule 14D-9, and any amendments and supplements to
these documents can also be obtained by directing a request to Investor Relations Department, NRG
Energy, Inc., 211 Carnegie Center, Princeton, New Jersey 08540.
NRG and its directors and executive officers will be deemed to be participants in the solicitation
of proxies in connection with its 2009 Annual Meeting. Detailed information regarding the names,
affiliations and interests of NRGs directors and executive officers is available in the definitive
proxy statement for the 2009 Annual Meeting, which was filed with the SEC on June 16, 2009.
Forward-Looking Statements
This communication contains forward-looking statements that may state NRGs or its managements
intentions, hopes, beliefs, expectations or predictions for the future. Such forward-looking
statements are subject to certain risks, uncertainties and assumptions, and typically can be
identified by the use of words such as will, expect, estimate, anticipate, forecast,
plan, believe and similar terms. Although NRG believes that its expectations are reasonable, it
can give no assurance that these expectations will prove to have been correct, and actual results
may vary materially. Factors that could cause actual results to differ materially from those
contemplated above include, among others, risks and uncertainties related to the capital markets
generally.
The foregoing review of factors that could cause NRGs actual results to differ materially from
those contemplated in the forward-looking statements included herein should be considered in
connection with information regarding risks and uncertainties that may affect NRGs future results
included in NRGs filings with the SEC at www.sec.gov. Statements made in connection with the
exchange offer are not subject to the safe harbor protections provided to forward-looking
statements under the Private Securities Litigation Reform Act of 1995.
# # #
Contacts:
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Investors: |
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Media: |
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Nahla Azmy |
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Meredith Moore |
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609.524.4526 |
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609.524.4522 |
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David Klein |
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Lori Neuman |
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609.524.4527 |
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609.524.4525 |
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Erin Gilli |
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Dave Knox (Texas and Louisiana) |
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609.524.4528 |
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713.795.6106 |