Exelon boosts hostile bid for NRG 12%

Exelon Corp. sweetened its hostile takeover bid for NRG Energy Inc. by 12 percent to $8 billion in stock, citing newly identified cost savings along with NRG's recent deal for Reliant Energy's Texas retail business. Exelon Chairman and CEO John Rowe called it a "best and final offer." The new bid ups the price for NRG by about $1 billion. "Together the two companys' shareholders get something very rare, a truly effective combination in an industry in which significant profitable growth is very hard to come by," Rowe said in a conference call. NRG, which rejected Exelon's previous bid, said it would review the latest offer.

Johnson & Johnson, making a big jump into the risky but potentially lucrative field of Alzheimer's disease, is taking a major stake in Irish biopharmaceutical company Elan Corp., investing up to $1.5 billion initially. The two will cooperate to complete research on two injected drugs to stop progression of the mind-robbing disease and on a vaccine to prevent the buildup of plaque in the brain that causes increasing memory loss, confusion, wandering and aggression. The deal, announced Thursday, sent Elan's U.S. shares up 60 cents, or 8.6 percent, to close at $7.60. J&J shares fell $1.09, or 1.9 percent, to $55.98. The agreement could reinvigorate ailing Elan and save the jobs of top executives who face shareholders at their July 17 annual meeting. It would make J&J a major player in one of the biggest areas of unmet medical need and -- if further testing is successful -- bring the treatments to market faster.

Rates for 30-year home loans inched downward this week, but still remain above record lows posted during the spring, Freddie Mac said. The average rate for a 30-year fixed-rate mortgage was 5.32 percent this week, below last week's average of 5.42 percent. Last year at this time, the average rate for a 30-year fixed-rate mortgage was 6.35 percent, Freddie Mac said. Rates on 30-year mortgages fell to a record low of 4.78 percent earlier this year. But then they rose as high as 5.6 percent in June after yields on long-term government debt, which are closely tied to mortgages rates, climbed as investors worried that the huge surplus of government debt hitting the market could trigger inflation. Since then, the yield on the 10-year Treasury note has fallen back from an eight-month high of 4.01 percent reached in June to 3.51 percent Thursday.

The Internet just got a little less sweet. Hershey Co. announced Thursday that it was closing its Hershey's Gifts online service July 31. After that, if customers want the nation's second-largest candy maker's products, they'll have to visit local stores. "Hershey's is making the strategic decision to exit the online retail business," said Hershey spokesman Kirk Saville. "The current business model is not sustainable."

The European Central Bank (ECB) left its benchmark interest rate unchanged at 1 percent Thursday, preferring to wait and see if its "spectacular" infusion of credit into the banking system will loosen lending to consumers and businesses in the euro zone's struggling economy. Bank President Jean-Claude Trichet said the ECB was pleased by the demand for its record 442 billion ($623 billion) euros in 12-month credits to banks last week, but wouldn't comment about what more it might do. The new loan program comes on top of cutting the bank's main interest rate from 4.25 percent to 1 percent since October. The ECB sets interest rates for the 16 countries that use the euro, a bloc of some 320 million people that accounts for nearly 17 percent of the world's economic output.

Orders to U.S. factories jumped in May by the largest amount in nearly a year, another sign that the nosedive in manufacturing is nearing an end. The Commerce Department said Thursday that total orders rose 1.2 percent in May, better than the 0.8 percent increase that economists had expected. The April performance was revised slightly lower to a gain of 0.5 percent, from 0.7 percent. The May increase was the best showing since a 2.1 percent rise last June.

FROM NEWS SERVICES