The recession created many motivated sellers – but buyers sometimes need to show more motivation, too. In hindsight, Exelon’s bid last autumn to become America’s largest electric utility by buying NRG was far from the knockout blow necessary to win over shareholders. Eating its words about not sweetening its “very sweet” offer, it justified Thursday’s 12.4 per cent increase weeks before NRG’s crucial annual meeting by identifying further cost savings. In fact, its first offer was opportunistic and it had little choice given the appreciation of NRG stock that had left the original offer at a 4 per cent discount.

NRG management’s cool reception last year made sense and served shareholders well. But they should not reflexively reject the latest offer. True, the premium remains modest and is still 40 per cent below NRG’s price a year ago. Much has changed in eight months though, including visibility about power prices. They may stay weak for quite some time based on the forward natural gas curve, reducing the intrinsic value of low-cost coal and nuclear plants. Exelon’s decision to slow down a large nuclear development of its own keeps NRG’s more viable South Texas Project attractive. Financial markets have recovered enough that Exelon’s need to refinance NRG’s debt is no huge obstacle.