For months, the only words to escape from Constellation Energy Group's boardroom were statements praising the company's $4.7 billion emergency takeover by investor Warren Buffett - support required under the terms of the hastily arranged agreement.
But minutes after Constellation executives called off the deal in favor of a $4.5 billion nuclear energy partnership with Paris-based Electricite de France, chief executive Mayo A. Shattuck III emerged with a different perspective.
"We were well aware that there was a window for someone else to come in and make a better offer," Shattuck said Wednesday, shortly after the company released details of the EDF deal. "Now we're back to being a 100 percent publicly traded company again; we're still a Fortune 500 company based in Baltimore; and we're back to a more stable platform."
Yesterday, as Constellation continued its business on Pratt Street as an independent company and one of Baltimore's major employers, analysts offered differing views on whether breaking the deal with Buffett was the right course. Few would discuss whether Constellation always figured that someone would step forward with a better offer.
Buffett's MidAmerican Energy Holdings Co. had fronted $1 billion to Constellation and lent its boss' considerable bank accounts and reputation to rescue the Baltimore company from its credit crisis. MidAmerican will receive $593 million in breakup fees and 10 percent of Constellation's stock as a result of the deal's cancellation. MidAmerican officials declined to comment yesterday on what future role they might play in the company. Shares of Constellation rose 97 cents yesterday, or just over 4 percent, to close at $23.97 on the New York Stock Exchange. That is about 10 percent below the $26.50 per share the company rejected from Buffett, and some analysts called it a bargain.
"The share reaction presents a buy opportunity," said Gabelli & Co. analyst Barry Abramson in a report released yesterday. "The EDF deal, in my opinion, gives [Constellation] the liquidity it needs and the time it needs to gradually wind down its energy trading business and go back to concentrating on getting the full value out of its physical assets - nuclear and non-nuclear power plants."
Jefferies & Co. released a report yesterday calling Constellation's shares "attractive," and saying that the EDF deal appears to provide the company with enough cash to weather any lingering problems.
