Financial News

Exelon (NYSE: EXC - news) , the US electricity producer that has been trying since last October to acquire rival NRG Energy (NYSE: NRG - news) , on Thursday boosted its hostile bid by 12 per cent to about $7.5bn and said the move marked its "best and final offer."

Exelon said it had decided to raise its offer after identifying another $1.5bn in cost savings that would result from combining the businesses and adding in the benefits of NRG's recent purchase of a retail business from Reliant Energy (NYSE: RRI - news) .

In total, Exelon said it could squeeze out $3.6bn to $4bn in operational synergies by melding the businesses together and transforming NRG. The Chicago-based company said it was confident it could refinance NRG's $4.7bn of senior notes and other debt and still maintain investment grade credit ratings.

NRG has repeatedly rejected Exelon's earlier offer, which stood at 0.485 Exelon share for each share of NRG. The new offer raises that exchange ratio to 0.545 of an Exelon share per NRG share. NRG urged shareholders to take no action while its board reviewed the revised offer.

NRG has scheduled a July 21 annual shareholder meeting, and Exelon plans to agitate at that meeting for the election of proposed alternate nominees to NRG's board of directors.

Shares in NRG were 2.8 per cent lower at $25.31 in early New York trading, while Exelon was down 2.3 per cent at $50.36.