EDF wants to buy Constellation Energy for $35 per share despite agreement with MidAmerican Energy

By Lisa Kerner

Charlotte, N.C., Sept. 22 - Constellation Energy Group, Inc. shareholder EDF International, a subsidiary of Électricité de France International, SA, said it offered to acquire Constellation for $35.00 per share on Sept. 19.

The terms of EDF's offer, made in conjunction with Kohlberg Kravis Roberts & Co. LP and TPG Capital, LP, included an immediate investment of $1 billion on Sept. 22 through the purchase of non-voting preferred stock.

EDF said the preferreds would be convertible into 10.4% of Constellation's voting equity and 5.6% of non-voting equity convertible into voting equity and $750 million total principal amount of 10% senior notes.

Constellation's board of directors has not responded to EDF's offer but has approved Constellation's agreement to be acquired by MidAmerican Energy Holdings Co. for approximately $4.7 billion, or $26.50 cash per share.

Constellation, a Baltimore energy products provider, will issue $1 billion of preferred equity yielding 8% to MidAmerican as part of the companies' agreement.

A $175 million termination fee payable by Constellation to MidAmerican is also included in the agreement, a form 8-K filed with the Securities and Exchange Commission reported.

EDF believes that the MidAmerican transaction "does not generate value creation expected by shareholders."

The EDF Group is an integrated energy company based in Paris.

MidAmerican Energy is an energy services provider located in Des Moines.

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