Mirant drops bid for NRG Energy

After rebuff over price, firm opts to avoid a long fight

June 13, 2006|Associated Press

ATLANTA -- Energy supplier Mirant Corp. said yesterday that it is rescinding its nearly $8 billion bid to acquire rival NRG Energy Inc., an about-face analysts say was not surprising, given NRG's unwillingness to consider a deal.

NRG shares fell more than 7 percent.

Edward Muller, Mirant's chief executive, said that while the company believes combining the companies would be a good idea, Mirant acknowledges a long battle would not be.

Princeton, N.J.-based NRG pointed out that over the past two years its stock has appreciated 120 percent. ``We are poised for further value creation and look forward to the continued execution of our strategic plan," NRG said.

Mirant shares fell 7 cents to $24.38; NRG shares fell $3.93, or 7.7 percent, to $46.92.

Atlanta-based Mirant's withdrawal of its offer, made in late May, follows a decision by NRG's board to rebuff the unsolicited offer, saying it significantly undervalued NRG. Mirant then sued, claiming that NRG was unfairly blocking the acquisition.

Mirant had proposed to buy NRG at about $57.16 a share. It said it had a financing commitment of about $11.5 billion and proposed to buy NRG at a premium of about 33 percent to NRG's share price.

A Mirant-NRG combination would have made it among the largest US power producers.

In January, Mirant emerged from Chapter 11 bankruptcy -- the 11th largest in US history at the time of the filing in July 2003.