Analyst:Exelon to rethink NRG bid at board meeting

NEW YORK, June 10 (Reuters) - Exelon Corp (EXC.N) plans to reconsider whether or on what terms to go forward with its hostile bid for independent power producer NRG Corp (NRG.N) at a June 30 board meeting, an analyst said in a research note on Wednesday.

Bernstein analyst Hugh Wynne said he met with Exelon management on Tuesday along with a group of investors.

According to Wynne, Exelon Chief Executive John Rowe told the group that management will present its analysis of the financial impact of the proposed deal to the board, which will then make a decision on the bid.

"The June 30th board meeting is a regularly scheduled meeting. There are a number of items on the agenda, and of course NRG is one of them," Exelon said in a statement. "We continue to believe our offer is full and fair."

Exelon plans to announce the decision between the board meeting and NRG's July 21 annual meeting, Wynne said.

Exelon, the largest nuclear power company in the United States, in October offered 0.485 of one of its shares for every NRG share. It has nominated a slate of directors to stand for election at NRG's annual meeting.

Earlier this year, shareholders holding around 51 percent of NRG's stock indicated support for the deal in a tender offer.

But the bid has become the subject of much speculation as the spread between the bid's value and NRG's stock price has tightened. Some analysts have suggested that this means that Exelon would have to materially raise its bid to win NRG shareholder support.

Wynne said that Exelon might also need to issue equity in order to complete the deal without triggering a credit ratings cut.

A $1 billion equity issuance would "dilute Exelon stock by 3 percent, reducing the expected benefit of the acquisition and rendering it more difficult for Exelon to improve the exchange ratio offered NRG's shareholders -- as NRG's share prices indicates it may be necessary to do," Wynne wrote.

Exelon shares rose $2.22, or 4.6 percent, to $50.10 on the New York Stock Exchange on Wednesday afternoon. NRG shares were up $1.18, or 5.25 percent, at $23.67, around 2.2 percent below the implied value of the Exelon bid, which values NRG at about $6.4 billion. (Reporting by Michael Erman; Editing by Gary Hill)