RPT-Exelon faces tough test as NRG shareholders vote

(Repeats July 20 story for wider readership)

* NRG shareholders to vote on Exelon proposals Tuesday

* Deal spread indicates skepticism in Exelon bid

By Michael Erman

NEW YORK, July 20 (Reuters) - Exelon Corp (EXC.N) faces a
key test in its hostile takeover bid to acquire NRG Energy Inc
(NRG.N) on Tuesday when shareholders vote on Exelon's proposed
slate of directors standing for election to NRG's board.

If none of its directors is elected at Tuesday's annual
meeting, Exelon has warned it will pull its offer for the
independent power producer, and it seems to be facing an uphill
battle to avoid this.

All four proxy advisory firms that counsel shareholders on
how to vote have advised against Exelon's proposals, and the
spread between the company's offer and Exelon's share price has
widened as the meeting approached.

"The market's betting that it won't go through, and the
market is usually pretty smart on these things," said James
Halloran, energy consultant to Financial America Securities. "I
don't see any indication that this is anything more than trying
to keep a brave face on this thing at this point."

Exelon, the largest U.S. nuclear power company, made its
initial hostile bid for the independent power producer in
October and raised its bid earlier this month.

It is currently offering 0.545 Exelon shares -- worth about
$28.37 at Monday's close -- for every NRG share. NRG, whose
shares closed at $23.55 on the New York Stock Exchange on
Monday, has rejected the bid as too low.

As part of its hostile offer, Exelon has proposed to expand
NRG's board to 19 seats from 14 and elect nine new directors.

In a letter to NRG shareholders last week, Exelon Chief
Executive John Rowe said if none of its directors was elected,
then "the desires of NRG stockholders will be clear. We will
abandon our efforts to acquire NRG and go our own way."

Exelon said if all nine of its directors are elected, it
"will press forward with determination" in its bid, but will
remain disciplined with respect to price.

If only four new directors are elected, the company said it
may or may not proceed with the bid.

RiskMetrics, the top proxy adviser, has suggested
shareholders would support a deal if Exelon raised its bid to
around 0.6 of its shares for every NRG share.
(Reporting by Michael Erman, editing by Matthew Lewis)