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
Filed by a Party other than the Registrant o
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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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)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
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the filing fee is calculated and state how it
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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On July 8, 2009, NRG Energy, Inc. (NRG) sent the following letter to NRG stockholders:
[NRG ENERGY, INC. LETTERHEAD]
July 8, 2009
Dear NRG Stockholders:
The Annual Meeting of Stockholders of your company, NRG Energy, is now less than two weeks away. At
that meeting you will have the opportunity to vote both on Exelons alternative slate of directors
and on their proposal to increase the size of the Board to 19, nine of whom would be directors
picked by Exelon for the purpose of achieving favorable consideration of Exelons offer to acquire
NRG. Exelon finally has acknowledged the extreme inadequacy of their offer and the erosion of NRG
stockholder support for it. On July 2nd, they increased their offer from 0.485 to 0.545
Exelon shares for your shares in NRG. While their offer represents a move in the right direction,
it still represents only a 7.9% premium over the closing share price of NRG on July 1st,
the night before their offer.
Exelons revised proposal appears to be an acknowledgement of the obvious: that NRG is worth
substantially more. This is a view that we have heard in many of our direct discussions with our
largest institutional stockholders. Judging from the paltry 12% of NRGs outstanding shares that
were tendered at the time Exelon postponed its third exchange offer, clearly many NRG stockholders
share our view that NRG is worth substantially more than Exelons current highly conditional
proposal.
NRGS CURRENT DIRECTORS ARE PROVING EVERY DAY THAT THEY ARE DEDICATED TO
ENHANCING AND PROTECTING STOCKHOLDER VALUE
We are pleased to report that NRG increased its full-year guidance for adjusted EBITDA to $2.5
billion. In addition, based on the record strength of the Companys current liquidity, NRG s Board
of Directors has authorized an increase in the Companys previously announced share buyback program
to $500 million, continuing NRGs long history of returning capital to shareholders. NRG intends to
resume its common share repurchases later this year and will seek to complete the $500 million in
buybacks by the end of 2009.
The NRG Board also has given careful consideration to the revised offer from Exelon and the Boards
response is reproduced in its entirety below. We are confident that you will find the decision and
its reasoning as compelling as the Board itself found. The decision that you are being called upon
to make now is whether you want the Directors who are the best
suited to create and enhance the value of your holdings in NRG or whether you want to give over the
Board to new directors nominated by Exelon?
NRGS RESPONSE TO EXELONS REVISED OFFER:
July 8, 2009
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 |
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President and Chief Executive Officer
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Chairman of the Board |
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cc: Board of Directors of Exelon Corporation, c/o Corporate Secretary, Exelon Corporation
WHAT CAN YOU DO TO ENHANCE YOUR INVESTMENT IN NRG?
Whether or not you plan to attend the Annual Meeting, NRG stockholders have the opportunity to tell
Exelon that its offer is not acceptable and does not provide NRG stockholders with the fair value
represented today nor the potential value of NRG in the future by voting the WHITE proxy card.
VOTE FOR YOUR BOARDS NOMINEES ON THE WHITE PROXY
CARD TODAY AND AGAINST THE BOARD EXPANSION PROPOSAL
SPONSORED BY EXELON
We believe that Exelons proposals for the Annual Meeting are merely a means to force through its
inadequate and highly conditional exchange offer. Exelon should properly compensate NRG
stockholders if they want to buy NRG.
To do your part in defeating Exelons inadequate offer, please vote by phone or Internet following
the instructions on your WHITE proxy card. You may also sign, date and return the enclosed WHITE
proxy card promptly after you receive it. You may also vote by phone or Internet by following the
instructions on your WHITE proxy card. Do not vote any Exelon proxy card at all as it may cancel
your previous vote for NRG.
Your vote is important, no matter how many shares you own. If you have
any questions or need any assistance voting your shares, please contact MacKenzie Partners, Inc.,
which is assisting NRG in this matter, at 800.322.2885.
On behalf of NRGs Board of Directors, we
thank you for your continued support.
Sincerely,
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David Crane
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Howard Cosgrove |
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President and Chief Executive Officer
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Chairman of the Board |
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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.
Your vote is important, no matter how many or how few shares you own!
If you have any questions, require assistance with voting your WHITE proxy
card, or need additional copies of the NRG proxy materials, please contact:
NRGproxy@mackenziepartners.com
(212) 929-5500 (Call Collect) or TOLL-FREE (800) 322-2885
To vote your shares, please vote the WHITE proxy card via telephone or internet
by following the instructions on your proxy card. Or you may sign, date and mail the enclosed WHITE proxy card in the
envelope provided.
We encourage you to disregard and not return any BLUE proxy cards that you receive from Exelon.