Constellation Energy Pleads for Merger Approval
Wholesale power generator Constellation Energy revealed on Tuesday that it likely would have filed for bankruptcy if not for an immediate $1 billion rescue that came from MidAmerican Energy Holding Co. The cash infusion from MidAmerican –a unit of Warren Buffett’s Berkshire Hathaway Inc.– came as part of a $4.7 billion bid to purchase the Baltimore, MD based energy company which operates power plants in 11 states.
Constellation warned in a regulatory filing that unstable conditions in the marketplace make the deal with MidAmerican critical for the company to complete.
In September, MidAmerican announced that it would buy Constellation for $26.50 per share, plus the immediate $1 billion investment.
The Wall Street Journal reported on Tuesday that the French nuclear power company Electricite de France SA (EdF) –which owns 9.5 percent of Constellation’s stock– is mulling a new bid for Constellation.
Constellation said in the filing that only MidAmerican’s offer was viable, and that a deal with EdF would involve additional regulatory headaches.
A vote on the deal by the company’s shareholders is expected on Dec. 23, and the deal can be completed as soon as the second quarter of 2009.
Constellation’s shares rose more than 5 percent in trading on Tuesday –most of it coming in a late rally– to close at $25.15 per share.