Constellation Energy Group sealed an agreement yesterday allowing Warren Buffett's MidAmerican Energy Holdings to buy the company for $4.7 billion, even as the Baltimore firm's largest shareholder was reported to be weighing a higher bid for the company.
The board of Electricite de France met yesterday to "present different options regarding Constellation Energy," said spokeswoman Carole Trivi. She declined to say what options were being considered or whether a decision was made.
EDF's renewed interest comes after the French state-controlled energy company passed on a possible deal with Constellation earlier this week. The company explored increasing its stake in Constellation before the MidAmerican deal was made.
Published reports yesterday indicated EDF is now considering different scenarios, including topping the $26.50-a-share bid from Des Moines, Iowa-based MidAmerican. EDF must make a joint bid with a U.S. company since foreign entities cannot own a majority stake in a nuclear power plant.
Constellation, which owns Baltimore Gas and Electric, agreed this week to be acquired by MidAmerican after Constellation's stock price plummeted amid the credit crisis on Wall Street. By signing the deal yesterday, MidAmerican will purchase $1 billion of preferred shares from Constellation to immediately avert a potentially fatal credit downgrade, which fueled the shotgun sale announced Thursday.
A Morningstar analyst said yesterday that a definitive merger agreement between the two companies would not prohibit EDF, which nearly doubled its stake in Constellation to 9.5 percent recently, from joining the table so late in the game.
"I wouldn't say it's completely unlikely that Constellation could have other people looking at this," analyst Paul Justice said, noting another bid could include compensation for MidAmerican. "Any bid would have to be a substantial premium [above] $26.50. To the right suitor, Constellation is worth substantially more."
Constellation shares gained $1.56, or 6.45 percent, to close at $25.76 yesterday.
Constellation spokesman Rob Gould declined comment on the EDF reports. MidAmerican Chief Executive Gregory E. Abel could not be reached last night.
Paul Fremont, an analyst at Jefferies & Co. in New York, said EDF's move, however, is too late.
"We'd be highly skeptical of EDF being able to change the outcome at this late hour," Fremont told Bloomberg News.
