NRG investors losing interest in Exelon bid?

Exelon is extending the date NRG Energy shareholders can tender their shares as part of its hostile takeover bid until August 21, a month after NRG’s July 21 shareholder meeting.
The Chicago-based power plant operator says its extending the offer “… so that NRG stockholders can focus on the decisions to be made at the NRG annual meeting, which is the critical matter before them at this time.” But as it notes at the bottom of the letter to shareholders, in what looks like boilerplate, Exelon notes:

As of 4:30 p.m. New York City time on June 16, 2009, NRG stockholders had tendered and not withdrawn 33,028,179 shares of NRG common stock in Exelon’s exchange offer, which represented over 12% of the outstanding shares of NRG common stock.

The real prize in the Exelon/NRG takeover battle: a stake in the planned two-reactor expansion of the South Texas Project nuclear power plant, shown here in a rendering.

Twelve percent? What happened to the 46 percent announced back in January? And 51 percent a few months after that?
NRG (which started mailing out its proxies this week) today put out a statement reiterating the inadequacy of the Exelon bid:

“Based on yesterday’s closing price for both stocks, Exelon’s offer represents a premium of only 3.6% to NRG stockholders. NRG believes this exchange offer result is a clear and convincing message to Exelon that a strong majority of NRG’s stockholders believe that Exelon’s proposal is not in their best interests. NRG continues to view Exelon’s highly conditional proposal as inadequate due to a number of factors, including its dilution of NRG stockholders’ cash contribution, lack of premium or committed financing, and deterioration in Exelon’s prospects.”

Neel Mitra of Simmons & Co. sees two likely outcomes:

“1) Exelon increases its offer which it will decide after June 30th at its board meeting or 2) Walk away. This deal will not go through at the current offer and that’s why Exelon extended this tender out to after the proxy vote for NRG’s shareholder meeting in July.”

Gimme Credit makes an interesting observation about another way Exelon could fulfill its desires for NRG’s nuclear assets (which has really been a key driver for the deal):

… NRG had previously announced it would sell a 20% interest in the new units [at the South Texas Project nuclear plant] to other interested parties to diversify project risk. Project costs have been pegged at “more than $6 billion”. Exelon’s capital base would seem to be of some value here.