425
Filed by NRG Energy, Inc. pursuant to
Rule 425 of the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: NRG Energy, Inc.
Commission File No.: 001-15891
On February 18, 2009, NRG Energy, Inc. (NRG) issued the following open letter to all NRG
stockholders.
NRG Energy, Inc. Issues Open Letter to NRG Stockholders
PRINCETON, NJ; February 18, 2008NRG Energy, Inc. (NYSE: NRG) today issued the following open
letter to NRG stockholders regarding Exelon Corporations unsolicited proposal to exchange 0.485 of
its shares for each share of NRG stock.
February 18, 2009
Dear NRG Shareholders:
As the February 25th deadline for Exelons unsolicited exchange offer extension
approaches, you may be considering whether or not you should tender your shares to Exelon. Let us
explain to you why we believe that you should NOT tender.
Since September 2008, NRGs Board and management have expended an enormous amount of time and
resources considering Exelons offer, and we continue to view it as an inadequate and uncertain
offer for a strong, fiscally sound, well-run competitive power generation company with an extremely
bright future and exciting growth opportunities.
Over the past few months, we have met with many of our larger shareholders. Many of those who
indicated a willingness to tender into Exelons offer conveyed to us that their motivation was not
because they liked the price being offered by Exelon but because they perceived the tender as a
risk-free way to keep the process going. We understood their perspective, and consequently had
further discussions with Exelons CEO, John Rowe. Those discussions proved fruitless. Rowe made it
clear that Exelon would NOT make any meaningful increase in the price being offered to NRG
stockholders, even if allowed to conduct due diligence. Therefore the meeting with Rowe reinforced
our view that Exelon must raise its price to a meaningfully improved level before we would engage
in due diligence as part of a broader market discovery process involving other prospective
bidders/partners.
Please be assured that we would support a deal with Exelon at a fair price but, at this point, we
have no reason to believe they are willing to offer a fair price. On Exelons January 22 earnings
conference call, Rowe stated, The deal simply cannot get done if everyone wants
to get all of the value. Essentially, what Exelon is saying is that it seeks to secure all of the
value in NRG for Exelons shareholders to the extreme detriment of NRGs shareholders. Based on the
current offer from Exelon, using Exelons own numbers together with NRGs increased free cash flow
in 2010, resulting from various tax strategies, NRGs shareholders would receive 17% of the
combined company even though NRG would be contributing 36% of the free cash flow of the combined
company, resulting in a 53% cash dilution to NRGs shareholders. In this market environment where
cash is king, more so than it has ever been before, this is an extremely unattractive deal for
NRGs shareholders.
We want to assure all of our shareholders that your Board and management continue to act in your
best interests and we are hard at work seeking to maximize shareholder value. In fact, NRG recently
announced 2008 fourth quarter and full year earnings results, which were the best financial results
in our five-year history, in terms of both adjusted EBITDA and cash from operations before
collateral movements. The results included $2.3 billion in 2008 annual adjusted EBITDA and $1.4
billion in cash from operations. On our February 12th earnings call, we confirmed
guidance for full year 2009 of $2.2 billion in adjusted EBITDA and $1.5 billion cash from
operations for 2009. Our total liquidity, as of December 31, 2008, stood at $3.4 billion with $1.5
billion of cash on hand, which translates into $12.23 per share and $5.49 per share, respectively.
Additionally, our nuclear development partnership, NINA, has achieved success upon success with the
STP 3&4 development. The project has gained momentum, demonstrated by its position in the top tier
of new nuclear projects under consideration by the Department of Energy for federal loan
guarantees, with a conditional award decision expected before the end of this year, and the Nuclear
Regulatory Commissions publishing of its review schedule for STP 3&4s operating license. These
steps keep the project on track to secure its operating license by 2012 and to be in the vanguard
of the nuclear renaissance in the United States.
NRGs record strong performance, along with the underlying fundamental value of our assets,
operations, nuclear development partnerships and strong market position, further underscores that
Exelons current offer is inadequate, dilutive and significantly undervalues NRG.
The best thing you can do to help maximize NRGs value is to send Exelon the message that their
current offer is inadequate, as two of our major shareholders have done publicly. Even if you
tendered into the initial exchange offer on January 6th, we urge you to reconsider and
retract your tender this month into Exelons exchange offer so as to prompt them into making a full
and fair offer, which we believe they have the wherewithal to deliver.
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 |
President and Chief Executive Officer
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Chairman of the Board |
Important Information
This communication does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of proxy of any stockholder of NRG Energy, Inc. (NRG). NRG plans to
file with the Securities and Exchange Commission (the SEC) and furnish to its stockholders a
proxy statement and white proxy card in connection with its 2009 Annual Meeting of Stockholders
(the 2009 Annual Meeting). INVESTORS AND STOCKHOLDERS OF NRG ARE URGED TO READ THE PROXY
STATEMENT FOR THE 2009 ANNUAL MEETING IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION.
In response to the exchange offer proposed by Exelon Corporation referred to in this news release,
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.
Investors and stockholders will be able to obtain free copies of NRGs proxy statement (when it
becomes available), the Solicitation/Recommendation Statement on Schedule 14D-9, any other
documents filed by NRG in connection with 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 any such
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. Information regarding NRGs directors and
executive officers is available in its Annual Report on Form 10-K for the year ended December 31,
2008, which was filed with the SEC on February 12, 2009, and its proxy statement for its 2008
Annual Meeting of Stockholders, which was filed with the SEC on April 2, 2008. Detailed information
regarding the names, affiliations and interests of individuals who will participate in the
solicitation of proxies of NRGs stockholders will also be available in NRGs proxy statement for
the 2009 Annual Meeting.
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.
Contacts:
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Media:
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Investors:
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Meredith Moore
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Nahla Azmy
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609.524.4522
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609.524.4526 |
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Lori Neuman
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Dave Klein
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609.524.4525
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609.524.4527 |
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Dave Knox |
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Erin Gilli
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713.795.6106 (Texas and Louisiana)
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609.524.4528 |
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