Wholsale electric exposure

Solus Alternative Asset Management agrees with the NRG board's view that Exelon's unsolicited offer to buy the company for $6.5 billion is inadequate. Solus is the investment adviser to Sola Ltd. and Solus Core Opportunities Master Fund, which, combined, own 14 million NRG Energy shares (6% of the total outstanding).

Exelon, meanwhile, has made an all-stock offer totaling about $6 billion, for NRG Energy (NRG), which last September became the first company to file for a permit in the new round of construction proposals.

Hold -- Price 25 on Oct. 21
by Jefferies & Co.

Downgrading from Buy, following Exelon's proposal to acquire NRG ... [in] an all-stock offer at a fixed exchange ratio of 0.485 Exelon shares for each share of NRG common. Our lowered target, 26.50, reflects the [offer. Based on shares at 25], this represents 12-month price appreciation and total return potential of 6%. Risks: earnings are highly sensitive to long-term natural-gas prices; or a decline in demand ... or a decline in capacity revenues in the New York City and Texas markets. Market cap: $7 billion.

Cramer: Exelon Deal Should Happen:
Jim Cramer calls Exelon's bid for NRG "the first real deal ... of this era."

Click here to watch the video.

Shares of NRG Energy (NRG) jumped after Warren Buffett's Berkshire Hathaway disclosed a stake in the Texas power producer.

NRG Energy is a wholesale power-generation company that operates a broad portfolio of power plants in 5 countries. Most of NRG's assets are in the U.S. (primarily the northeast, TX & CA). It is also involved in energy marketing and trading and fuel procurement, and its recent acquisition of Texas Genco gives it scale advantages over peers. NRG exited Chapter 11 bankruptcy as a stand-alone company in 2003.

Goldman said it is reinstating coverage of NRG Energy (NRG) with a Buy rating, as M&A talks with Calpine have subsided. Note free cash flow yields and attractive hedging of output. Price target at $48.

Energy Sector

Assets benefit from multiple earnings drivers. Warp speed, Mr. Scotty!