Sept. 22 (Bloomberg) -- Electricite de France SA, Europe's biggest power producer, said it offered to acquire Constellation Energy Group Inc. with KKR & Co. and TPG Capital LP for $6.2 billion, 32 percent more than Warren Buffett agreed to pay.

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

EDF will be displaced as Constellation's top shareholder after MidAmerican paid $1 billion in cash for a 19.9 percent stake today. The 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.

``The offer accepted provided immediate liquidity and a strategic transaction that we think is executable,'' Shattuck said on the call. ``That, amongst other variables considered, represents a superior offer.''

Constellation rose $1.44, or 5.6 percent, to $27.20 in New York Stock Exchange composite trading. EDF fell 0.7 percent to 50.49 euros in Paris. Class B shares of Buffett's Berkshire Hathaway Inc., parent of MidAmerican, dropped 5.2 percent to $4,355.

Debt-Free Deal

``I don't see EDF coming back into the transaction,'' said James Halloran, who helps manage $34 billion in assets, including Constellation shares, at National City Private Client Group in Cleveland.

MidAmerican sought no financing contingencies and injected $1 billion in cash immediately to shore up Constellation's energy-trading business, Shattuck said. It also offered better prospects for regulatory approval than a foreign buyer would have for a utility owner with three nuclear power plants.

Constellation shares plunged last week amid concern turmoil in financial markets would wreck its trading business. Standard & Poor's threatened a debt-rating downgrade on Sept. 17.

``The backing of Berkshire Hathaway means an awful lot in a market that has this fear factor embedded in it,'' Shattuck said. Berkshire Hathaway has the highest of 10 investment-grade credit ratings by both S&P and Moody's Investors Service.

No Response

Constellation, owner of Baltimore Gas & Electric, and Des Moines, Iowa-based MidAmerican announced their preliminary agreement before U.S. markets opened Sept. 18. EDF said the Constellation board didn't respond to its request to make a counterproposal before signing a definitive merger agreement with MidAmerican on Sept. 19.

EDF said its group was willing to invest $1 billion in Constellation today in exchange for preferred stock convertible to 10.4 percent of voting equity and 5.6 percent of non-voting equity convertible to voting equity and $750 million of senior notes paying 10 percent interest. According to the filing, EDF, KKR and David Bonderman's TPG offered to pay $35 a share under an agreement they planned to complete by Oct. 9.

MidAmerican is paying $1 billion for preferred stock paying 8 percent interest and convertible into 19.9 percent of common stock and $1 billion of senior notes paying 14 percent, according to U.S. Securities and Exchange Commission filings.

State Approval

Constellation will ask Maryland's utility regulator to complete its review of the sale to MidAmerican within six months, Shattuck said.

MidAmerican's $1 billion payment to Constellation has been wired, Shattuck said. Stock certificates will be delivered today, he said.

As owner of almost 17 million Constellation shares, EDF stands to lose hundreds of millions of dollars if Buffett's purchase goes through at $26.50 a share. Prior to last week, Constellation traded between $55.62 and $107.97 since the start of 2007.

``I'm positive that they are not happy about the developments simply from the standpoint of being a shareholder,'' Shattuck said. ``The events of last week put us in a position where we had to look for the most superior offer, and at the end of this process, we took what we perceived to be the superior offer.''

Nuclear Venture

EDF bought the stake as part of a joint venture that intends to build as many as four nuclear reactors in North America. Today, MidAmerican's Abel said he likes Constellation's nuclear business.

``It makes sense for EDF to want to continue that partnership,'' Halloran said. ``There's definitely going to be growth in nuclear capacity, and it gives them a base to deal from.''

EDF is the dominant utility in France, where 77 percent of electricity is generated by nuclear plants. The company seeks to operate 10 plants of a new design, the European Pressurized Reactor, or EPR, in the U.S., China, Europe and South Africa by 2020, Chairman Pierre Gadonneix said in May.

MidAmerican has utilities in the U.S. Midwest and West. Buying Constellation would add power stations in the East, including nuclear plants that became more profitable in the past year as costs for fossil-fueled generation increased and power prices rose.

British Energy Targeted

EDF is also targeting the acquisition of British Energy Group Plc and raised its offer for the U.K. utility by 1.2 percent to 12.4 billion pounds ($22.6 billion), or 774 pence a share, two people with knowledge of the talks said on Sept. 18.

British Energy, the U.K.'s largest nuclear power producer, rejected an offer on July 31 from EDF at 765 pence a share because its biggest private shareholders said the bid undervalued its eight nuclear stations and adjacent land where more reactors may be built. British Energy's land is attractive to EDF, which plans at least four new U.K. reactors from 2017.

Arnaud Scarpaci, who manages 150 million euros ($222 million) at Agilis Gestion SA in Paris, said that seeking to win out in bidding for Constellation, EDF will likely get Buffett to commit to going forward with the joint venture's nuclear development plans.

``The three parties seem to have benefited from this,'' Scarpaci said. ``Constellation got the cash it needed, Warren Buffett got a good price for the company, and EDF will get assurances on EPR development so it can concentrate on British Energy.''

To contact the reporters on this story: Jim Polson in New York at jpolson@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net.

Last Updated: September 22, 2008 16:05 EDT