NRG Energy Inc (NYSE:NRG) Buys Out Edison Mission


Dallas, Texas 10/24/2013 (Financialstrend) – NRG Energy Inc (NYSE:NRG) is a $9.8 billion market capitalized diversified utilities company which is been in the news over the past couple of weeks for its takeover bid of Edison Mission.  On October 18 it was announced that NRG had come forward to buy out the Edison Mission Energy for $2.63 billion. Readers should know that Edison Mission has filed for bankruptcy protection and is a 100% owned subsidiary of Edison International. On successful completion of the deal, NRG hopes to up its power generation capacity by close to 8000 mega watts. It is also hoping that Edison Mission will help the company enter into new geography and will be able to account for economics of scale. The acquisition will also help NRG diversify its power generation sources to include wind and natural gas assets. In it’s efforts to raise the requisite $2.6 billion by issuing common stock of close to 12 million.

Current creditors of the cornered Edison Mission have indicated their strong backing to the proposed merger with even the bondholders who had previously showed their thumbs down for an earlier discussed refinancing deal have submitted their approval to NRG take over in front of the bankruptcy court. The Chicago court in front of which Edison had filed for protection is expected to review the take over and settlement plan on October 24.

At close of business on October 23, the stock of NRG was trading at $28.42 per share which means a 3.42% increase in value in the past week and by close to 3.68% in the past quarter. The energy producer had posted sales of $9.4 billion in the past 12 months and recorded sales of $308 million in the same period. It has recorded a dividend payout yield of 1.69% and its share holders would be hoping that the acquisition will improve the payouts further.