Mirant Sues NRG Over Rejected Bid

Power company Mirant Corp. sued rival energy producer NRG Energy Inc., claiming that NRG unfairly rejected its nearly $8-billion takeover bid.

In a lawsuit filed late Tuesday, Atlanta-based Mirant sought a court order directing NRG to stop obstructing Mirant’s attempts to acquire NRG.

Mirant asserted that NRG was using a “transaction ploy” to turn aside the offer by claiming that Mirant used confidential information from NRG’s former financial advisor. Mirant said it had not received any confidential information.

Princeton, N.J.-based NRG called the lawsuit “a desperate attempt to compensate for the fact that Mirant’s proposal significantly undervalues NRG.”

News of the suit, filed in Delaware Chancery Court, came a day after the takeover bid became public when NRG announced it was rejecting the offer, saying it was not in the best interests of its shareholders.

The lawsuit does not name the financial advisor. However, in a May 23 letter that NRG released Tuesday, NRG executives refer to Goldman Sachs, which was involved in efforts to extract Mirant from bankruptcy protection.

The letter to Mirant Chairman and Chief Executive Edward R. Muller and Mirant’s board said discussions of combining the companies dated to November.

Mirant said it received a financing commitment of about $11.5 billion and proposed acquiring NRG at about $57.16 a share.

Mirant shares fell 37 cents to $24.88 on Wednesday while NRG shares rose $6.74 to $49.75.

The combined company would have more than 43,000 megawatts globally, with more than 37,500 megawatts in the United States, according to Mirant, making it among the largest U.S. power producers.