Maryland Business

By: jackie.sauter

At first blush, French energy giant Electricite de France SA’s offer to block the sale of Constellation Energy seems to address the majority of the issues that led the company to accept a buyout from billionaire Warren Buffet’s MidAmerican Energy Holdings Co.

EDF has offered up a $4.5 billion deal, which includes a $1 billion cash infusion and the option for $2 billion more in cash if Constellation wants to sell non-nuclear assets. Plus, the deal is centered on creating a joint venture solely around Constellation’s nuclear energy business.

EDF even says its deal would overcome the break-up fees associated with the MidAmerican deal. The company says the $175 million termination fee is covered by the cash infusion and, considering the deal could be for as much as $6.5 billion altogether Constellation could also afford the “costly” 14 percent senior note attached to MidAmerican’s $1 billion cash infusion.

The board of directors of Constellation said it would review the deal, but did not make any immediate changes to its current recommendation for the MidAmerican deal. Will shareholders who have seen stock prices wither from $100-plus a year ago though be as willing to vote for the $26.50 per share MidAmerican deal?

Or, will the EDF deal prevail because it keeps the company a publicly traded one, and could give shareholders the chance to recoup some losses?

BEN MOOK, Assistant Business Editor