November 26, 2020

DealBook: Exelon Nears Takeover of Constellation Energy

8:12 p.m. | Updated

The energy utility company Exelon is near a deal to buy the Constellation Energy Group for about $7.7 billion in stock, people briefed on the matter said Wednesday.

A deal between the two would be the latest in a recent wave of consolidation within the energy industry, especially among utility companies.

Under the terms of the proposed takeover, Exelon would issue 0.93 of a new share for each Constellation share. At Wednesday’s closing prices, that would be worth about $38.59 a share.

That is a roughly 17 percent premium to Tuesday’s closing price, the last day before rumors of a potential deal pushed Constellation’s stock higher.

The merger could be announced as soon as Thursday morning, the people briefed on the matter said, cautioning that talks had not yet concluded and might still collapse.

An Exelon spokesman, Paul Elsberg, said: “Exelon continually evaluates all opportunities to add value for our shareholders, including M. A. However, we don’t comment on rumors about specific M. A. activity.” A representative of Constellation was not immediately available for comment.

Shares of Constellation rose 4 percent, to $34.40, on Wednesday amid reports of a potential sale. Platts, an energy information company, first reported the possible deal. Exelon shares rose slightly on Wednesday, to $41.49, giving the company a market value of $27.5 billion.

Utilities have sought to combine with each other to gain more customers, in part to fight falling prices. One of the largest deals announced so far this year is the $13.7 billion all-stock merger of Duke Energy and Progress Energy.

Constellation, based in Baltimore, has tried to sell itself before. Two years ago, it agreed to sell itself to Berkshire Hathaway’s MidAmerican Energy Holdings for $4.7 billion — only to cancel that deal in favor of selling nuclear assets to Électricité de France for $4.5 billion.

Constellation, based in Baltimore, has tried to sell itself before. Two years ago, it agreed to sell itself to Berkshire Hathaway’s MidAmerican Energy Holdings for $4.7 billion — only to cancel that deal in favor of selling nuclear assets to Electricité de France for $4.5 billion.

Exelon has also stumbled in previous deal-making attempts as well. It pursued a $7.5 billion hostile bid for NRG Energy beginning in 2008, only to drop its offer after failing to win over the target’s shareholders.


This post has been revised to reflect the following correction:

Correction: April 27, 2011

An earlier version of this article incorrectly stated the premium in the reported takeover offer as 18 percent.

Article source: http://feeds.nytimes.com/click.phdo?i=46e40dc9dc3b8ac50ab07c3eabdb728a

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