The chairman of Warren Buffett's MidAmerican Energy Holdings tells CNBC it won't try to outbid France's EDF in the battle for Constellation Energy .
In a statement to CNBC's Becky Quick, David Sokol says today (Tuesday): "We will not counterbid .... The structure of the transaction (that Électricitié de France has proposed) is not one we would be comfortable with."
Back in September, at the height of the credit crisis, MidAmerican reached a tentative agreement to throw Constellation a billion-dollar lifeline as part of a deal to purchase the entire company for $4.7 billion in cash. It looked like a typical "Buffett bargain."
Then, earlier this month, Électricitié de France responded with an offer to pay $4.5 billion for just half of Constellation nuclear business. EDF said that valued the entire company at roughly double what Buffett & Co. had agreed to pay.
So, it was no big surprise when Constellation's board authorized talks with EDF about its offer.
And it's certainly not a surprise at all that Buffett doesn't want to get into a bidding war.
As we pointed out just about two weeks ago in the WBW post Why Fight When You Can Take the Money And Run?,Buffett's deal with Constellation includes some big break-up penalties, including almost $600 million in cash, 10 percent of Constellation's common stock, and a 14 percent payback for MidAmerican's billion-dollar cash infusion.