It's a beautiful idea: Constellation Energy shareholders reject the emergency merger with Warren Buffett's MidAmerican Energy Holdings, retake control of their company and watch the stock head back upward.
Baltimore gets to keep a Fortune 500 corporate headquarters.
And Constellation shareholders beat the planet's greatest investor at his own game.
It's not anything that big shareholders are counting on. For now, Buffett's deal is the only thing keeping Constellation stock from plunging even further than it has.
But it's not impossible. Buffett locked up Constellation at such a screaming bargain that shareholders of all stripes are dreaming of a Houdini scenario.
Such an outcome is almost certainly being discussed inside Constellation. ("We look forward to closing the transaction with MidAmerican and building our business," said spokesman Robert L. Gould after I asked.)
Consider that Constellation's three nuclear power plants may be worth $2 billion or more by themselves. Buffett's paying $4.7 billion for the whole caboodle, which includes two dozen other electricity plants, Baltimore Gas & Electric, a big trading operation, tons of real estate and more.
Earlier this year, several analysts rated Constellation a "buy" when the stock was selling for $107. Buffett's price: $26.50.
Constellation's board agreed to his measly offer because the alternative was probable bankruptcy. As financial markets went crazy last month, Constellation faced an attack on its stock, a creditor strike, a ratings downgrade and an immediate need for hundreds of millions in cash.
Buffett fronted the dough - at a very steep price.
But now that the crisis has been averted, should shareholders reject the deal that Constellation boss Mayo A. Shattuck III signed? The vote isn't until December at the earliest. Meanwhile, Constellation could try to fix the problems that required Buffett's help. Then shareholders could send him packing.
"If you were a shareholder you might say to yourself, 'This really substantially undervalues my shares. Now that the company has been able to get out from under those issues, the best value for me is not to sell,' " said Chris Cernich, an analyst at Proxy Governance. "Shareholder resentment," he adds, "is a real potential risk" to completing the deal.
Naturally the beatified "Sage of Omaha" will extract his due, no matter what happens. Buffett wins even if he loses.
