French energy giant Electricite de France said Wednesday it would not make a new bid for Constellation Energy, citing the difficult worldwide credit market.
“After discussions with several potential American partners, EDF has determined that current conditions are not conducive to presenting a new offer for Constellation Energy Group,” EDF said in a statement.
Last month, Baltimore-based Constellation accepted a $4.7 billion, $26.50-a-share buyout offer from Warren Buffett’s MidAmerican Energy Holdings Co. The companies in recent weeks have begun filing for regulatory approval of the deal, including transfer of Constellation’s nuclear licenses to MidAmerican.
Following announcement of the merger, EDF said Constellation spurned its higher, $35-a-share offer. The revelation triggered a number of lawsuits from Constellation shareholders.
Earlier this year, EDF became Constellation’s largest single shareholder, increasing its stake in the energy company to 9.5 percent from 4.97 percent. The company’s buyout withdrawal comes as the Nuclear Regulatory Commission has begun a review of that increased stake, according to regulatory documents.
EDF has also considered a buyout of its partnership with Constellation to develop new nuclear operations in the United States, according to media reports last week. In its statement Wednesday, the company said it still sought to build four reactors in the U.S.
Should EDF’s ownership stake in Constellation or that partnership change, it could trigger another regulatory review, according to an NRC spokesman. Federal law and NRC regulations prohibit reactor licenses from being “owned, controlled or dominated by foreign interests.”
Constellation was notified of the review in an Oct. 3 letter from regulators. The review is automatic with EDF’s increased stake in Constellation, the NRC said.
“It’s pretty pro forma,” NRC spokesman Scott Burnell said of the review, which is not classified as a formal investigation. “Anytime you have a situation where a foreign entity has an interest in a licensee, the NRC does have to review any change in ownership.”
A Constellation subsidiary, Constellation Energy Nuclear Group, owns the licenses for the Calvert Cliffs power plant in Southern Maryland and two other U.S. nuclear facilities. Last year, Constellation and EDF became 50-50 joint partners in UniStar Nuclear Energy, which has applied for several NRC licenses to build nuclear reactors at Calvert Cliffs and elsewhere.
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