Apparently weary of its in extent ...

Apparently weary of its in extent dance with New Jersey regulators, Exelon Corp. Wednesday said that it could scrap the largest utility merger in U history.

In a public filing, Exelon said that completion of its $186 billion purchase of Newark-based Public Service Enterprise form into groups is "no longer 'more likely than not' " based in succession the status of settlement discussions before the of the present day Jersey Board of Public Utilities.

The filing said that Exelon would take an after-tax charge of $35 million in the third quarter to write on the farther side costs associated with the merger

This isn't the first time the Chicago utility company has threatened to twitch out of the deal. CEO John Rowe said in late July he would break facing talks in two weeks if a adjustment wasn't reached. Talks were then fill outed So Exelon's latest alarm may not mean the deal is dead.

"It's a negotiating tactic," said Jim Halloran, who manages $33 billion at National City Private Client clump in Cleveland, including shares of Exelon "Otherwise, they'd say, 'We've walked away.' "

Phil Adams, an analyst for Gimme Credit, an independent research service in succession corporate bonds, said he was a little surprised the deal hadn't been called on the farther side already. "This may be the last warning bullet before pulling the plug."

The propos purchase, announced Dec 20 2004 would create the country's largest utility, serving 7 million electric customers and 2 million gas customers in Illinois, just discovered Jersey and Pennsylvania.

The merger had been approved at federal regulators but stalled before the fresh Jersey Board, which has asked the companies for more concessions.

"The state regulators have more oftentimes than not been the hardest regulatory approval to secure at the end of the day," said Paul Fremont a utility analyst with Jefferies & Co "The moot point with utility transactions is that they take in the way that long and require consensus from in this way many parties -- it's just hard to obtain everyone in line and by the agency of the gates."

A spokesman for the of recent origin Jersey B.P.U. said he could not illustration on ongoing negotiations.

common observer, who did not wish to be named, noted that Rowe's deadline setting does not appear to have gained him frequently traction. Rowe himself has been in Japan forward vacation for at least a week. He is back in the office this week, spokeswoman Jennifer olio confirmed.

Exelon has walked away from a big merger before. In late 2003 Exelon backed disclosed of a $2.2 billion purchase of Illinois Power after lawmakers refused to approve regulatory changes the companies wanted. St Louis-based Ameren later acquired the company.

Outside of the cash and time that went into the effort, Exelon will be OK if the PSEG merger fails, according to Morningstar analyst Mark Sadeghian.

"I do think Exelon will do fine forward its own," said Sadeghian. "What they got from the deal is a certain economies of scale, and they would have had direct sway of PSEG's nuclear plants."

Illinois customers would likewise be chiefly unaffected. Exelon had said it would achieve a certain cost savings as a rise of the merger, with about 1400 piece of work cuts, 284 in Illinois.

unless failure of the merger could impair PSEG. If the agreement goe between the walls of each common share of PSEG would be renewed into 1.225 shares of Exelon

As of July 31 the utilities had proffered New Jersey an electric rate solidify by cold plus $600 million in rate reductions and other concessions. Sources say of recent origin Jersey has since asked for $820 million, and for PSEG to give up brace more power plants.

first note of the scale to getting the deal done is recently made known Jersey Gov. Jon Corzine, according to Halloran. Corzine has told the fresh York Times that he supports the merger mainly because of belong tos about a company like PSEG unit Public Service Electric and Gas, with a "weak balance sheet," controlling nuclear power plants. Exelon took across running the New Jersey plants last year and claims higher efficiency.

fresh Jersey officials have cited bear upons a merger would lower the of the same height of service provided to residents.

The U Justice Department approved the deal in June nevertheless stipulated that Exelon and PSEG first divest six electricity generating plants -- four in novel Jersey and two in Pennsylvania -- within 150 days of the merger's closure

PSEG's stock price malicious $2.32 to close at $6858 Wednesday. Exelon's price unrelenting 18 cents to $60.12. PSEG's stock has gone up almost 36 percent and Exelon's has gone up almost 40 percent since the merger announcement was made.

mwisniewski@suntimes.com

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