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A report on: Electricite de France targets US Constellation Energy again

By Amarendra Bhushan for CEOWORLD Magazine Updated:December 3, 2008

Electricite de France S.A. (“EDF”) announced that, through its subsidiary EDF International, it has sent a letter to the Board of Directors of Constellation Energy proposing to acquire a 50% ownership interest in Constellation’s nuclear generation and operation business for $4.5 billion. EDF’s proposal also provides for an up-front $1 billion cash investment in Constellation to be credited against the purchase price for EDF’s interest in the nuclear generation and operation business, and an option pursuant to which Constellation could sell non-nuclear generation assets to EDF having an aggregate value of up to $2 billion.

EDF expects it can receive the necessary regulatory approvals for the acquisition of its interest in the nuclear generation and operation business and close the transaction within six to nine months, upon Constellation’s termination of its proposed transaction with MidAmerican Energy Holdings Company and execution of a definitive agreement with EDF.

“As Constellation’s largest stockholder, EDF has long admired and been a committed partner to Constellation,” said Pierre Gadonneix, Chairman and Chief Executive Officer of EDF. “We continue to believe that Constellation is fundamentally strong and EDF, like many others, believes that the proposed MidAmerican transaction significantly undervalues Constellation and its future opportunities.”

“We are confident that the terms of our proposal are demonstrably superior to those of the MidAmerican transaction. In addition to providing Constellation stockholders with an opportunity to realize the value of their investment in the Company, our proposal provides more than sufficient liquidity to allow Constellation to remain a strong, standalone public company. The EDF proposal also creates an opportunity for Constellation to play an important role, together with EDF, in the development of nuclear generation in Maryland and beyond to the benefit of Constellation’s stockholders, employees and customers,” continued Mr. Gadonneix.

Flsh Points:

- Electricite de France SA is considering a number of ways to snag Constellation Energy Group Inc (CEG.N: Quote, Profile, Research, Stock Buzz) away from Warren Buffett’s MidAmerican Energy Holdings Co.

- In October, EDF, dropped a bid for Constellation, saying the credit crisis had made financing more difficult to obtain.

- MidAmerican Energy, a subsidiary of Warren Buffett’s Berkshire Hathaway Inc, agreed to buy Constellation in September for $4.7 billion.

- Constellation shareholders are set to vote on the deal on Dec 23.

- Electricite de France SA said Wednesday it’s offering $4.5 billion to buy half of the nuclear power business of U.S. wholesale power generator Constellation Energy.

- It offer amounts to around $52 per share.

- EdF said the offer includes a $1 billion “upfront” cash infusion in Constellation.

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