EDF Has `Financial Flexibility to Move' on Constellation Energy

By Tara Patel

Sept. 24 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, has ``financial flexibility'' for raising its stake in Constellation Energy Group Inc. in order to safeguard planned development of nuclear reactors in the U.S.

``We have financial flexibility to move,'' on Constellation, EDF Chief Executive Officer Pierre Gadonneix said at a news conference today in Paris on a takeover offer for British Energy Group Plc. ``My conviction is that in the U.S. we want to work with an American partner, which was the case until today. If others come along we are open to dialogue with them.''

The French utility has ``determination and rapidity'' to safeguard its goals of developing nuclear reactors in the U.S. and partnerships for their operation, he said.

These were the first comments from Gadonneix, 65, after Electricite de France announced two days ago it offered to acquire Constellation with buyout firms KKR & Co. and TPG Capital LP for $6.2 billion, 32 percent more than Warren Buffett's MidAmerican Energy Holdings Co.

The agreement announced Sept. 18 for MidAmerican to buy Baltimore-based Constellation for $4.7 billion, or $26.50 a share, isn't adequate, Paris-based EDF said in a public filing. Constellation Chief Executive Officer Mayo Shattuck said the Buffett deal was ``superior'' after the largest U.S. power marketer plunged 58 percent in the preceding three days.

The French utility has a joint venture with Constellation, in which it has a 9.5 percent stake, to develop so-called new generation reactor models called EPRs, or Evolutionary Power Reactors, that are capable of producing about 1,600 megawatts of electricity.

The EDF filing was made as Shattuck and MidAmerican CEO Greg Abel told investors and analysts on a conference call that they expect to close their transaction in a year or less.

To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net