Filed by Xcel Energy Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: NRG Energy, Inc.
NRG Energy, Inc.'s Commission File No. 001-15891
February 15, 2002
Board of Directors
NRG Energy, Inc.
901 Marquette Avenue
Minneapolis, Minnesota 55402
Attention: Board of Directors
Ladies and Gentlemen:
As you know, Xcel Energy has previously announced that it is reviewing its
options with respect to NRG, which options include the possible acquisition by
Xcel Energy of the outstanding publicly held NRG stock. Having reviewed its
options, our Board of Directors has determined that it is desirable to acquire
that stock. We believe this would yield a number of significant benefits and
that it is the best strategy in the light of recent changes in the capital
markets and in the energy sector and general economy. Most importantly, we
believe that the transaction is essential to the funding of NRG's operations.
As a result, we will announce this morning an exchange offer pursuant to which
the public shareholders of NRG will be offered 0.4846 shares of common stock of
Xcel Energy in a tax-free exchange for each outstanding share of NRG's common
stock. Based on the $23.73 closing price of our shares on February 14, 2002, our
offer represents a value of $11.50 per NRG share and a 15% premium to the
closing price of NRG common shares on that date. We believe that the transaction
will be well received by your public shareholders, especially in light of the
premium to recent trading prices.
Our exchange offer will be conditioned on there being tendered in the offer
enough shares so that, when taken together with the shares we would own upon
conversion of our Class A shares, our ownership of NRG reaches at least 90%. We
will not waive this condition. The exchange offer will also be subject to any
requisite regulatory approvals and other customary conditions.
Promptly after the successful completion of our exchange offer, unless there is
an order prohibiting us from doing so, we will effect a "short form" merger of
NRG with a subsidiary of Xcel Energy. In the merger (subject to the exercise of
appraisal rights), each share of NRG's common stock will be exchanged for the
same number of shares of our common stock as is paid in the exchange offer. As a
result, NRG would become a wholly owned subsidiary of Xcel Energy.
Board of Directors
NRG Energy, Inc.
February 15, 2002
Page Two
We intend to file our offer materials with the Securities and Exchange
Commission and commence our exchange offer as soon as practicable.
Although we are not seeking to negotiate the terms of the transaction with you
and are not asking for NRG Board approval, we are aware that you will need to
review the transaction and communicate with your shareholders. You may wish to
retain independent financial and legal advisors to assist you, and we would
support that decision.
We look forward to moving ahead with this exciting transaction, which we believe
will generate value for Xcel Energy and NRG shareholders alike.
Sincerely,
/s/ Wayne H. Brunetti
Wayne H. Brunetti
* * * *
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction, Xcel Energy will file an exchange
offer prospectus and related materials with the SEC. INVESTORS AND SECURITY
HOLDERS ARE ADVISED TO READ THIS DOCUMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT
WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders may obtain a
free copy of the exchange offer prospectus (when available) and other documents
filed by Xcel Energy with the SEC at the SEC's web site at http://www.sec.gov.
Free copies of the exchange offer prospectus, once available, as well as Xcel
Energy's related filings with the SEC, may also be obtained from Xcel Energy by
directing a request to Xcel Energy at 800 Nicollet Mall, Minneapolis, MN 55402,
Attn.: Investor Relations, or by telephone at (612) 215-4559 or 4535.
Xcel Energy Internet Address: http://www.xcelenergy.com
FORWARD-LOOKING INFORMATION
The statements herein regarding reduction of cash requirements, the impact of
the transaction on earnings, the expectation or estimates of earnings per share
and growth rates, future dividends and similar statements of future results
identify forward-looking information. Although Xcel Energy believes that its
expectations are based on reasonable assumptions, it can give no assurance that
the offer, if made, will be successful or that other expectations will be
realized. Factors that could affect whether the transaction is completed or
whether the expectations will be realized include the satisfaction of all
conditions to the exchange offer that cannot be waived and the satisfaction or
waiver of all other conditions, the actual results of Xcel Energy following
completion of the transaction, the ability to dispose of or terminate projects,
to reduce expenses and to realize synergies, cash levels and similar matters.
Some of these conditions are expected to include the receipt of all required
regulatory approvals, the tender by shareholders of enough of the publicly held
shares so that Xcel Energy will own at least 90 percent of NRG's common stock,
and the absence of an injunction or litigation concerning the exchange offer.