Bloomberg: EDF supports a sale of Constellation
Take this with a truckload of salt. One anonymous source tells Bloomberg that EDF Group would support the sale of one of Maryland's biggest corporate citizens, Constellation Energy, parent of Baltimore Gas & Electric. The French EDF, which holds a large stake in Constellation, is in the process of divorcing Constellation over their troubled joint venture to build a third nuclear reactor at the Calvert Cliffs electricity plant.
EDF has several reasons to rattle this saber. 1) It's mad at Constellation for what EDF describes as Constellation's unilateral withdrawal over the weekend from the Calvert Cliffs project. Unable to obtain satisfactory government financing guarantees for the project, Constellation told the Energy Department it would no longer pursue the guarantees. 2) It's pressuring Constellation boss Mayo Shattuck not to exercise an option to sell EDF several older, fossil-fuel electricity plants for perhaps $1 billion more than they're worth. The option is a vestige of a 2009 deal in which EDF outbid Warren Buffett in a deal to rescue Constellation from bankruptcy. After having saved Shattuck's job a year ago, EDF, by seeming to agitate for a sale, now threatens it.
3) EDF owns 8 percent of Constellation's common shares and nearly half of its existing nuclear plants. An outright sale of Constellation would bear a good chance of letting EDF unload these assets at better prices than if it sold them in pieces. Bloomberg, however, puts a potential sale in a different light, quoting the source as saying that a new Constellation owner could salvage the partnership with EDF. That seems even less likely.
In any event, 8 percent of the common shares and one seat on Constellation's board aren't very effective tools for EDF to put Constellation in play. And with the story quoting only one anonymous source "with knowledge of the matter," it's hard to tell what EDF's intent is. But this sounds more like EDF being grouchy and contrary and less like a real threat to Constellation.
Comments
So basically a whole lot of nothing since EDF does not have controlling interest in the Nuclear Power Plants nor the one of the largest Energy Companies in the United States. Who needs the French anyway? They just stick up their nose to the rest of the world.
I'm looking forward to seeing the wind generation that Constellation is building in MD, the support that they have put behind the wind generation in PA, and all of the solar stuff they have done over the last few years.
It will be a true blessing when our country stops having to depend on foreign energy assistance.
Posted by: Phillip | October 12, 2010 10:47 AM
Poor ignorant Phillip. Foreign energy assistance is the outcome of idiots like Mayo running electric companies. Mayo bankrupts Constellation, Buffett strikes, the foreigners a.k.a EDF save Mayo's job, then Mayo bites the EDF......very white of him. By the way all the wind equipment is foreign and along with solar is heavily subsidized by taxpayers, who just borrow the money from foreigners for their grandchildren to repay. And for a new reactor....sorry pal, it is all foreign. Why wouldn't EDF put Constellation on the block, perhaps another foreigner would buy it, get rid of Mayo and his management crooks, then get serious about building a new reactor. We can only hope.
Posted by: pavel | October 13, 2010 10:43 AM
poor racist pavel
"very white of him"
Huh? Does that mean I should come back around and say that because President Obama is giving all kinds of money and stealing it legally through increased taxes and on a credit card spending spree with no way to pay it off I should say "very black of him"? Come on now, put your head on right. That's just racist.
Did you even click on that Bloomberg link and read it? I have no clue what was in the purchase agreement but if I understood it correctly they do not have controlling interest of the company.
I realize that a lot of those parts in the windmills are foreign made, probably right along side those same parts in your Chevrolet Monte Carlo. If Constellation closed it's doors in Maryland I'm certain the state would lose millions. Whatever agreement was signed between EDF and Constellation had to have been approved by the state of Maryland so I doubt anything is going away any time soon. After all, O'Mally raised sales tax 20%, should we also say 'very white of him' ?
Posted by: Phillip | October 13, 2010 1:59 PM
Dearest Phillip,
You can say 'very white' of whomever you please. Fact is, Maryland's fine upstanding electric company, run by an idiot and overseen by a board of brain dead and slightly unethical paperweights is a fine example of the 'white man'. The clause now referred to as the 'option' was put there by the white knights of EDF to allow for injection of more cash, if necessary, to keep the good ship Constellation from sinking again. It was not put there as a financial derivate to be played by one 'partner' against the other. A true example of American corporate greed. Greed is good said Mayo, screw my partner, I am out for shareholder value. But the goon forgot that the partner he is trying to screw is his biggest shareholder. Yes, mighty white of him. There is honor among thieves, but Mayo does not qualify. Sad, sad, show of how American business is run. Tragedy to watch the board sit by and show the international business world that Maryland corporations cannot be trusted. Mighty white indeed.
Posted by: pavel | October 13, 2010 2:48 PM