Power company's US$8 billion bid for rival rejected

DALLAS - Power company Mirant says it has made an unsuccessful bid to buy NRG Energy for US$8 billion ($12.6b) to create the largest US independent power producer.

The attempted takeover was the latest sign of growing interest among merchant energy producers to consolidate as the sector gets back on its feet after a credit crunch in late 2001.

The ensuing industry-wide downturn drove several large independent power producers, including NRG and Mirant, into bankruptcy.

Mirant, which emerged from bankruptcy in January, said it decided to go public with the offer after NRG snubbed the offer last week without entering into any discussions.

NRG said the offer was not in the best interests of its shareholders, calling it "the wrong deal at the wrong time". NRG said it had previously held talks to buy Mirant, but decided not to do so, in part because it believed Mirant's stock was overvalued.

The combined company would have 43,000MW globally, with over 37,500MW in the US.

- REUTERS