NRG Energy Inc., Calpine Corp. and Mirant Corp., U.S. power producers involved in failed takeover attempts in the past three years, are under increasing pressure to accept buyouts because of the credit freeze.
``There's been a sea change in access to capital in this industry,'' said Hugh Wynne, a utility analyst at Sanford C. Bernstein & Co. in New York.
Exelon Corp., the biggest U.S. utility company by market value, offered this week to buy NRG for $6.2 billion in stock in a bet that its superior creditworthiness will allow for refinancing of NRG's $8 billion in debt at lower costs. The credit crunch prompted Constellation Energy Group Inc., the largest U.S. power marketer, to accept a $4.7 billion cash offer last month from Warren Buffett's MidAmerican Energy Holdings Co.
The bids surfaced after Princeton, New Jersey-based NRG lost half of its market value in two months and Constellation's share price was halved in a week. Just two years ago, Baltimore-based Constellation had a deal, which was later dropped because of state opposition, to be acquired by FPL Group Inc. for $12.4 billion. NRG rejected a $7.86 billion takeover offer from Atlanta-based Mirant in 2006...MORE
Tuesday, October 21, 2008
NRG Squeezed by Credit Crunch as Exelon, Buffett Hunt (BRK.A; CEG; CPN; EXC; NRG)