Paper: CEG counteroffer 'most likely' course for EDF
Les Echos is reporting that EDF is considering either trying to team up with Warren Buffett's MidAmerican Energy in some kind of joint venture with the combined MidAmerican/Constellation Energy or launching a counter-bid for the Baltimore company.
The critical paragrah from Les Echos, the French financial daily:
The other possibility, which seems this evening the most likely: launching a counter-offer. But in this case EDF will need outside support. Contacts have already been made with various potential allies. Several American electricity companies should be tempted by this opportunity, especially since, as is widely believed, Warren Buffett is acquiring Constellation at a price that does not reflect the instrinsic value of the company. On paper, there is therefore room for an escalation [in price]. If EDF is able to find a partner, EDF would be able, according to several sources, to pay between $1 billion and $2 billion [more] in this case.One should not rule out that the group will get down to business this weekend.
Comments
A combination of EDF (the nuclear expert) and MidAmerican (the domestic fossil fuel organization) with T-lines is a great one. Buy the company and split off the nuclear and let MidAmerican run the core business and let EDF be the majority owner of Unistar. Than Maryland gets its white knight owner of BGE for 200 years in WB and the nuclear side gets the Fench concern who have run nucs since the 70's.
For the record, I'm a Constellation employee, who works outside of the corporate office and am not privy to any inside information. I am a businessperson and can see that WB is buying a great earning company on the cheap. It makes you wonder if Constellation didn't accept WB's offer to push the french into action. From my experience they sometimes need to be pushed.
Posted by: Edward Bielarski | September 19, 2008 2:48 PM