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By Samuel R. Avro on Dec 16, 2008 with no responses

Constellation Favoring EdF Over Warren Buffett

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U.S. power company Constellation Energy is leaning towards an agreement with Electricite de France (EDF) over the original buyout offer by Warren Buffett’s Mid-American Holdings Co, according to Reuters citing a source familiar with the situation.

EDF’s bid for the nuclear assets of its U.S. affiliate is an eleventh-hour counter-offer to a $4.7 billion friendly takeover bid for all of Constellation by MidAmerican, a unit of U.S. financier Warren Buffet’s Berkshire Hathaway Inc.

The French state-controlled company, already one of the biggest players in the nuclear power industry, made a $4.5 billion proposal for 50% of Constellation’s nuclear unit.

Mid-American offered $4.7 billion for the entire company.

At first, Constellation pleaded with investors to accept the deal from Warren Buffett, saying that they were near to going bankrupt before he stepped in.

But now it seems like the offer from the French nuclear giant may be too good to turn down. EdF already has a stake in the company with a 9.5 percent ownership stake.

The French company recently extended its takeover offer of British Energy in an effort to purchase 8 nuclear plants in the U.K.

Constellation shareholders are scheduled to vote on the Mid-American offer on Dec 23. According to the Reuters source, a deal with EdF may be announced as soon as this week.

The source also said that even if an agreement were to be reached, it would still need to obtain waivers of its bank covenants to seal the deal