Is TXU a merger target?: Exelon is reportedly shopping for power generation. Check it out:
(Dallas Morning News, The (KRT) Via Thomson Dialog NewsEdge) Sep. 26--TXU Corp. or its power plants could become acquisition targets now that merger talks between two big power-generation companies have broken down.
Exelon Corp. of Chicago and Public Service Enterprise Group Inc., in Newark, N.J., announced this month that, after working for nearly two years to merge, they're declaring the deal dead.
Exelon chief executive John Rowe said in a news report during the weekend that he's still shopping and that he's most interested in power-generation assets, particularly nuclear power plants.
An Exelon spokeswoman confirmed that company executives have discussed a deal with TXU. The idea wasn't necessarily to merge but possibly to swap generation capacity, or to strike a deal for Exelon to own or manage TXU's nuclear assets.
TXU spokeswoman Lisa Singleton said those discussions are long over.
"The discussions he was referring to were quite some time ago, about a year, and we're not in any current discussions," she said.
Still, there are a lot of coincidences that make Mr. Rowe's comments intriguing for investors.
TXU, which operates two nuclear reactors, recently announced it would build up to six more nuclear reactors at three plant sites.
The TXU announcement surprised industry observers because the company had been focused on a giant plan to build 11 coal-fired plants.
Further, TXU chief executive John Wilder last year mentioned discussions with other power-generation companies about sharing the nuclear power plant risk.
"I think we're going to be talking about that project for a long time, frankly," Mr. Wilder said during a conference call in August 2005.
"We're still working it. We still think it is a good idea. We're still having actually fairly productive discussions with a number of different companies."
Mr. Wilder praised Exelon last summer for its ability to run nuclear plants efficiently. Exelon is known for buying nuclear plants and improving operations.
"They have absolutely perfected this art of running these big complexes at very, very low-cost levels. We're trying to learn from them, we're trying to copy from them," he said during a presentation to investors at a conference hosted by Deutsche Bank in 2005.
These days, TXU engineers are working on designs to build nuclear plants quickly, efficiently, cheaply and repeatedly. The idea is to reuse the same design to streamline the building process.
TXU officials on Monday wouldn't comment any further on Exelon. Mr. Wilder is scheduled to speak at a Merrill Lynch conference today.
Exelon operates 17 nuclear reactors, none of them in Texas.
But last year, Exelon sent a 15-year nuclear power veteran to Texas to manage the company's two natural gas plants.
Gerome Randle became general manager of Exelon Power Texas in April 2005. He'd been working at an Exelon nuclear plant in Illinois since 2000.
Exelon declined requests to interview executives or managers about their plans for Texas.
Of course, as one analyst pointed out, these coincidences don't mean the companies are going to do a deal.
"Although there's a potential for something to happen, I think it's difficult to handicap the chances," said Paul Patterson, a power industry analyst with Glenrock Associates LLC in New York.
"It's not like they're in a supermarket and they're trying to decide which breakfast cereal to buy. ... [A merger is] not that simple. It involves a lot of work, a lot of assessment," he said.
TXU shares ended Monday at $61.32, up 2 percent.
E-mail [email protected]
Copyright (c) 2006, The Dallas Morning News
Distributed by McClatchy-Tribune Business News.
For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
Technorati
Del.icio.us
Slashdot
Digg
