?French utility Électricité de France (EDF) has made an unsolicited proposal to purchase a 50% ownership interest in the nuclear power-generation and operation business of integrated utility com pany Constellation Energy, Baltimore, (NYSE: CEG) for US$4.5 billion.


Constellation previously received an offer from MidAmerican Energy Holdings Co., Des Moines, Iowa, owned by Warren Buffett’s Berkshire Hathaway, to acquire the company for approximately $4.7 billion in stock. Constellation holds a 38% position in the upstream MLP Constellation Energy Partners LLC (NYSE: CEP).


The EDF proposal involves an immediate $1-billion cash investment in Constellation of nonconvertible cumulative preferred stock, which would be credited against the US$4.5-billion purchase price. EDF would provide Constellation with additional liquidity by entering an asset put option in which Constellation would have the option of selling to EDF non-nuclear power-generation assets with a value of up to US$2 billion prior to EDF’s acquisition of the nuclear generation interest.


Constellation said its board will review the EDF proposal as well as its responsibilities under the merger agreement with MidAmerican. Constellation said it has not withdrawn, modified or qualified its recommendation that shareholders vote in favor of the merger with MidAmerican. The shareholder meeting to vote on the Mid­American merger was scheduled for late December.


MidAmerican offered to pay $26.50 per Constellation share. Constellation traded as high as $107 in January, and fell as low as $14 on Sept. 16. Constellation will issue to MidAmerican $1 billion of preferred equity yielding 8%.


As of year-end 2007 and including assets from the MLP, Constellation held some 655 billion cu. ft. equivalent in proved reserves, producing more than 67 million cu. ft. equivalent per day. These assets are in Louisiana, South Texas, Wyoming, Arkansas’ Fayette­ville shale, Ohio, West Virginia, the Williston Basin and offshore Alabama.


Morgan Stanley and UBS Invest?ment Bank are advisors to Constellation in the proposed deal.

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