MidAmerican Won't Raise Constellation Bid
December 5, 2008
Reuters
MidAmerican Energy does not plan to raise its bid for Constellation
Energy Group Inc after Electricite de France SA submitted a competing bid
for some of the power company's assets, MidAmerican's chairman told
Bloomberg.
"We believe the merger agreement is in the best interest of
stakeholders," MidAmerican Chairman David Sokol said, according to
Bloomberg. "We have a signed merger agreement. We have no intention
to alter our bid."
MidAmerican, a unit of Warren Buffett's Berkshire Hathaway Inc,
agreed in September to pay $4.7 billion, or $26.50 a share, for
Constellation, which was on the brink of bankruptcy.
But earlier this week, French power company EDF unveiled a plan
to pay $4.5 billion for 50 percent of Constellation's nuclear assets and
give the U.S. company the option to sell it up to $2 billion more of nonnuclear
assets.
If Constellation backed out of the MidAmerican deal, it would
have to issue about 20 million common shares to the company, or about 9.9
percent of its outstanding stock, and pay it about $593 million in cash.
Constellation would also have to issue $1 billion in 14 percent
senior notes to MidAmerican, due to be repaid in December 2009.
(Reporting by Michael Erman; Editing by Andre Grenon)
(Reuters Messaging: [email protected]; +1 646 223 6021)
Reuters
MidAmerican Energy does not plan to raise its bid for Constellation
Energy Group Inc after Electricite de France SA submitted a competing bid
for some of the power company's assets, MidAmerican's chairman told
Bloomberg.
"We believe the merger agreement is in the best interest of
stakeholders," MidAmerican Chairman David Sokol said, according to
Bloomberg. "We have a signed merger agreement. We have no intention
to alter our bid."
MidAmerican, a unit of Warren Buffett's Berkshire Hathaway Inc,
agreed in September to pay $4.7 billion, or $26.50 a share, for
Constellation, which was on the brink of bankruptcy.
But earlier this week, French power company EDF unveiled a plan
to pay $4.5 billion for 50 percent of Constellation's nuclear assets and
give the U.S. company the option to sell it up to $2 billion more of nonnuclear
assets.
If Constellation backed out of the MidAmerican deal, it would
have to issue about 20 million common shares to the company, or about 9.9
percent of its outstanding stock, and pay it about $593 million in cash.
Constellation would also have to issue $1 billion in 14 percent
senior notes to MidAmerican, due to be repaid in December 2009.
(Reporting by Michael Erman; Editing by Andre Grenon)
(Reuters Messaging: [email protected]; +1 646 223 6021)