Warren Buffett May Have Competition for Constellation Energy
Constellation Energy Group's French joint-venture partner isn't happy with Warren Buffett's just-finalized deal to buy the Baltimore-based company.

The Wall Street Journal reports tonight (Friday) that Electricite de France called an emergency board meeting to "consider ways of maintaining some control" over Constellation.

Among the options board members are examining: an attempt to negotiate a power-sharing agreement with Buffett or the launch of a counterbid for 91.5 percent of Constellation that EDF doesn't already own.

The Journal reports EDF is worried that it may get shut out of Constellation's planned nuclear plants in the U.S. if it does get acquired by Berkshire Hathaway subsidiary MidAmerican Energy Holdings.

Late this afternoon, Constellation and MidAmerican announced a "definitive merger agreement" at $26.50 a share, or about $4.7 billion. Constellation will issue MidAmerican $1 billion of preferred equity at a yield of 8 percent as part of today's agreement. The planned merger still needs approval from regulators and shareholders.

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A tentative pact with the same terms was announced yesterday (Thursday) morning, apparently beating EDF to the punch.

The French company had said it was considering a rescue of Constellation after its stock was battered by worries over how the deepening credit crunch could affect its global commodities group.

The Journal says it's not clear whether EDF has approached Buffett of EDF about the matter.

There's divided opinion on whether EDF has anywhere to go at this point. The Journal quotes Jefferies analyst Paul Fremont as saying it seems "too late" for a counterbid.

But Angie Storozynski at Macquarie Research tells the newspaper there's "a lot of room left to increase your offer." She figures MidAmerican is getting Constellation for a quarter of its value, (sounds like a typical Buffett bargain), while the break-up fee would be just $1.1 billion to $1.4 billion.

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