Buffett's MidAmerican Energy To Buy Constellation

Well that is unfortunate - we are going to lose 10% or so as Constellation Energy (CEG) was forced to sell out ... and only got $26.50. Congrats to short sellers for nailing another company. This was a $65 stock a week ago - looks like MidAmerican got a steal since Constellation was desperate as the S&P rating agency was forcing its hand. Once they downgrade the debt, a death spiral ensues in this market.
 

• MidAmerican Energy Holdings Co. has reached a deal to buy Constellation Energy Group for $4.7 billion. Des Moines, Iowa-based MidAmerican will pay $26.50 per share for Baltimore-based Constellation. The two companies plan to sign a definitive merger agreement by the end of business Friday.

• The deal was unanimously approved by both companies' boards, but still requires approval from shareholders and governmental officials and is expected to close within nine months.

I am debating whether to sell now or wait a few days to see if there is a counterbid. On the plus side MidAmerican is not a public company so the shorts cannot drive it down for daring to buy such a damaged property.

Update: Aha. Looks like Buffet (BRK.A) is behind MidAmerican. Yes - he is a genius and knows how to pick the bottom of the barrel.

Comments

[mkreisel:]

Moody's downgrade, and Buffett swoops in.

Do you see the link here?

2008 Sep 18 11:44 PM