Constellation Energy to consider proposal from Electricite de France; MidAmerican vote set for Dec. 23

By Lisa Kerner

Charlotte, N.C., Dec. 3 - Constellation Energy Group, Inc. continues to recommend its shareholders approve the company's merger with MidAmerican Energy Holdings Co. on Dec. 23, despite receipt of an unsolicited proposal from its largest stockholder Electricite de France.

EDF, a Paris-based integrated energy company, wants to buy a 50% ownership interest in Constellation Energy's nuclear generation and operation business, excluding Constellation Energy's existing interest in the UniStar joint venture, for $4.5 billion.

According to a Constellation Energy news release, EDF would make an immediate $1 billion cash investment in Constellation Energy in the form of nonconvertible cumulative preferred stock, to be credited against the $4.5 billion purchase price.

Constellation Energy's board of directors said it will review EDF's "multi-faceted" proposal.

EDF said its proposal represents the equivalent of an offer of around $52 per share of Constellation Energy's common stock, or a 96% premium to MidAmerican's offer.

In September, the boards of directors of MidAmerican and Constellation Energy, a Baltimore energy products provider, approved a definitive merger agreement in which MidAmerican will acquire Constellation Energy for about $4.7 billion, or $26.50 per share.

MidAmerican Energy is a Des Moines energy services provider.

"We continue to believe that Constellation Energy is fundamentally strong and EDF, like many others, believes that the proposed MidAmerican transaction significantly undervalues Constellation Energy and its future opportunities," EDF chairman and chief executive officer Pierre Gadonneix said.

"We are confident that the terms of our proposal are demonstrably superior to those of the MidAmerican transaction," Gadonneix added.

EDF believes its proposal, which is not subject to a financing condition, is reasonably likely to result in a superior proposal under Constellation Energy's agreement with MidAmerican.

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