NRG urges shareholders to reject Exelon bid

LOS ANGELES (Reuters) - NRG Energy Inc (NRG.N) rejected Exelon Corp's (EXC.N) $6 billion-plus takeover bid for the second time on Monday, saying the offer was too low.

The U.S. company also recommended that shareholders not tender their shares to Exelon.

The second rejection by NRG Energy's board of directors came nearly two weeks after Exelon took its bid directly to NRG Energy shareholders by launching an exchange offer for all the company's outstanding shares.

NRG faced a Tuesday deadline to respond to Exelon's exchange offer.

"The board of directors is unanimous in its belief that the Exelon offer is inadequate, dilutive, significantly undervalues NRG and does not fully reflect the fundamental value of NRG's assets, operations and strategic plan," NRG Chairman Howard Cosgrove said in a statement.

Princeton, New Jersey-based NRG Energy first rebuffed Exelon publicly on November 9, two days before Exelon went hostile.

In a Monday regulatory filing, NRG said its chief executive, David Crane, met with Exelon CEO John Rowe in New York on September 30 to discuss a possible combination of their businesses. At that meeting, according to NRG, Rowe said he was "not prepared to discuss an exchange ratio, or even a general range of exchange ratios, at which Exelon would be willing to acquire NRG."

Crane, therefore, declined to allow Exelon to commence due diligence "without even a general understanding of the exchange ratio that Exelon would be prepared to offer."

Exelon announced its bid for NRG on October 19, offering 0.485 of its shares for each NRG share. The company has said that the combination of Exelon and NRG would create the largest U.S. power company, generating enough power to serve nearly 45 million homes.

NRG Chief Operating Officer Bob Flexon said the company does not necessarily believe in Exelon's "bigger is better" argument in favor of the deal.

"They've targeted being the lowest rung on the investment grade scale. We view that as not a desirable position to be," Flexon said in an interview. "Our approach to managing the capital structure and credit and rating agency issues is less risky."

Still, asked if NRG would consider a deal with Exelon if the offer was raised, Flexon said: "We take every offer very seriously. we evaluate every offer on its merits."

NRG shares rose 10.5 percent to close at $21 on the New York Stock Exchange. Exelon's stock rose 6.2 percent to close at $53.11, also on the NYSE.

(Editing by Jeffrey Benkoe, Leslie Gevirtz)