PRINCETON, N.J. -- An epic takeover battle that began nine months ago with a terse phone call from one giant power-company CEO to another, Exelon's John Rowe to NRG's David Crane, ended today in a Princeton hotel ballroom, when Exelon formally abandoned its hostile bid minutes after NRG shareholders overwhelmingly rejected Exelon's rival slate of board candidates.

"That's the end of it," Exelon (EXC, Fortune 500) vice president Bill Von Hoene said, shortly after NRG's annual meeting. "We've withdrawn our offer." The fight over the proposed merger, chronicled in detail in the latest issue of Fortune, was the most dramatic takeover battle in the U.S. at a time when M&A activity is down sharply.

Exelon, already the nation's largest electric utility, was trying to create what would have become the nation's largest electricity producer, and for a long time it looked like it might succeed. What made NRG (NRG, Fortune 500) attractive, among other things, was its plan to build the first new nuclear power plant in America in more than a generation.

Rowe launched his bid during last fall's global economic meltdown, offering NRG shareholders a 37% premium and the relative safety of Exelon's stronger balance sheet. Crane and NRG's board opposed the deal from the start, arguing that the proposed .485 share-exchange ratio was too low, and that Exelon's offer of greater security in turbulent times was a "false promise." But many NRG shareholders were tempted, and by late February, more than half had conditionally accepted Exelon's tender offer.

"I never lost confidence, but apparently I was the only one confident," Crane told Fortune after today's annual meeting. "Right then in early March, if Rowe had approached me and said, 'We're at .485 and I can get slightly into the point-five range' -- not even as high as they ended up going -- it would have been decisive."

But three factors ultimately turned the tide of shareholder sentiment against the deal, Crane believes. One was NRG's acquisition in early March of Houston power company Reliant's retail business, which added value that Exelon's offer failed to take into account. Second was Exelon's awkward admission last spring that it was not nearly so well hedged against fluctuations in energy prices as analysts had believed. Third was the dramatic rebound in global markets, which boosted confidence in NRG's growth prospects as a stand-alone company.

When Exelon finally did raise its offer last month, to .545, it was too little, too late. Afterwards, NRG execs tried not to gloat but couldn't help themselves. One, reacting with incredulity to Von Hoene's claim that as recently as this weekend the outcome of the shareholder vote remained in doubt, called Exelon "the most transactionally inept company I've ever seen." And NRG's advisors? They're happy. Total fees generated by NRG's win, according to NRG's M&A specialist Jonathan Baliff? About $37 million. 

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