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Warren Buffett Watch
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Constellation Isn't Breaking Up With Buffett Yet .. But Plans To Talk With Rival Suitor
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Gail Burton / AP The Constellation Energy building in Baltimore. (2005 file photo) |
] is not calling off its planned marriage to Warren Buffett's MidAmerican Energy Holdings ... yet. But it will check out the competition before gathering shareholders to ask for their blessing.Today Constellation put out a news release revealing that the company's board has given the go-ahead for "immediate discussions and exchange of information" with Électricité de France about its latest offer.
That bid challenges MidAmerican's hastily-hatched deal to buy the entire company for $4.7 billion.
EDF is offering to pay $200 million less for just half of Constellation's nuclear business. The French company figures its offer values Constellation at around $52 a share, almost double Buffett's 'bargain' price.
That's tough to ignore, so Constellation plans to talk to EDF about the numbers. Remember, the board has a responsibility to get the 'best' deal for shareholders. (Defining what's 'best' can be the tricky part.)
In the meantime, Constellation's board has not "withdrawn, modified or qualified its recommendation" that shareholders approve the MidAmerican deal when they meet on December 23. That's just two weeks away.
It's not clear that shareholders would follow that advice in any case. Several lawsuits have been filed challenging the Buffett deal, arguing the price is too low.
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But, as we pointed out in the WBW post Why Fight When You Can Take the Money and Run?, even if Constellation does eventually break it off with MidAmerican, Buffett gets a nice consolation prize. It features 10 percent of MidAmerican's common stock, almost $600 million in cash, and a 14 percent return on the $1 billion infusion that's MidAmerican has already pumped into Constellation.
Current Berkshire stock prices:
Class A: [US;BRK.A
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Class B: [US;BRK.B
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Questions? Comments? Email me at
- Taking On Dr. Doom: Warren Buffett's 'Buy and Hold' Strategy Is Alive and Well (December 1)
- Berkshire Hathaway Shares Bounce Back Above $100,000 (November 26)
- Buffett's Bank Bets "Paying Off" - Bloomberg (November 26)
- Warren Buffett Tops Business Week's Ranking of American Philanthropists (November 26)
- Warren Buffett Promises More Info On Berkshire's Derivatives In Annual Report (November 24)
- Barron's: Berkshire Hathaway's Stock Price Plunge Finally Makes It "Cheap" Again (November 23)
- Berkshire Hathaway Bounces Back By 16% For Best Day In Decades (November 21)
- Berkshire Hathaway Subsidiary Keeps Coachmen Alive By Acquiring RV Business (November 21)
Data is a real-time snapshot *Data is delayed at least 15 minutes
