Good research, Downey.
So if the merger is ultimately rejected, and that is no slam dunk, then EXC has to pay Pepco $180 million, while Pepco has to cough up between $259 million and $293 million to EXC. That's a gain for EXC of between $79 million and $113 million. Here's a salute to EXC's lawyers.
Also, the cost of generation/fuel are not part of Pepco's rate cases as it only has dregulated utilities. Your post is so wrong on so many levels.
Do your homework before you post next time. Pepco does not generate electricity so it is not subject to the emissions requirements. And it's Exelon, not Excelon. LOL
From a briefing on the merger, an excerpt, and it does not qualify the reasons, just if they fail.
The final bidding came down to Exelon and one other company that was prepared to pay $27.00 per share.
An unusual provision in the Merger Agreement provides for a reverse termination fee of up to
$180 million payable by Exelon to Pepco if the transaction does not close due to a failure to
obtain necessary regulatory approvals. Pepco’s proxy statement explains that this breakup fee is
a way to partially compensate Pepco for its inability to file new rate cases while the merger
transaction is pending
You got that right, PEPCO will pay EXC more than EXC will pay PEPCO, if the deal fails to be approved by regulators
Should the deal be scuttled, Pepco will be required to pay Exelon a termination fee of anywhere from $259 million to $293 million, according to an 8-K filed with the Securities and Exchange Commission last year. If the merger is terminated due to failure to obtain regulatory approval, "Exelon will pay [Pepco] a reverse termination fee equal to the purchase price paid up to the date of termination by Exelon to purchase the non-voting preferred stock, by redeeming the non-voting preferred stock for nominal consideration."
The deal, however, is far from dead, industry observers say. Proponents say it will bring service reliability improvements long sought by Pepco (NYSE: POM) customers. They include the Greater Washington Board of Trade, which called the District’s rejection “regretful” and a “missed opportunity.”
Hate to burst your bubble...it reads if the merger does not go through because it is rejected by D C, Excelon will pay the termination fee read the fine print !!!
You're right that Pepco will have to pay -- a termination fee between $259 million and $293 million. EXC is sitting pretty in this jackpot. It wins one way or the other.
The decision to block the merger had nothing to do with the interests of utilty customers - the liberals on the commission don't like nuclear power and hence will not approve of anything involving Exelon. Plain and simple.
Pepco merger doesn't matter. Strong dividend support in mid 20's. Plus they can continue to increase dividend and debt not that bad.
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LOL emissions? Pepco has no generation, they are a wires and pole company only. They sold off their generations assets like a decade ago when deregulation came.
Excelon is in a good position to comply with current and proposed Fed. regulations for emissions therefore limiting rate increases. Pepco is not. Pepco compliance will be costly and passed on to consumers. Being part of Excelon would have limited the cost.
Most of Pepco customers are in the 2 Highest Income Counties in the USA Fairfax Virginia and Montgomery County , Maryland. Then when you include the paying customers of the US Government, DC Government, US Military and Homeland Security and its offices. You come up with a Electrical Power user that is Not reaaly matched in terms of the ability to pay .Anywhere else in the USA. You absolutely don't have any concept of what Washington,DC is...
Exclon should walk away from the Pepco deal. Most of it's customers are deadbeats on welfare.
Washington is one loser of an area for an electric utility. I never could understand how Exclon got
suckered into making an off for Pepcp.
Head-strong. Misguided. Possibly complicit.
Take your pick. A measly 3-person commission in a small jurisdiction brings down a multi-billion merger. This is crazy, but EXC is a long-term survivor and thriver.
Anti-nuclear activists lobby a panel of 3 liberals and a multi-billion dollar deal falls apart. Time for Exelon to stop trying to doing business in the northeast.
Smart move. EXC can't seem to do anything right.
In spite of this, there's lots of people on this board that hold onto the stock tighter than a rusty pair of vice-grips.
I can only assume they're past and/or present employee's who are fiercely loyal to the company, & are willing to overlook the absolutely horrendous stock performance in the last 10 years.
Good luck with PEG