Electricite de France SA (EDF), Europe's biggest power producer, has teamed up with private equity firms KKR & Co and TPG Capital LP to make a $6.2 billion counter bid for American nuclear power producer Constellation Energy Group Inc.

The French company's offer is $8.50 per share or 32 per cent higher than the $4.7 billion ($26.50 per share) price that Warren Buffett's MidAmerican Energy Holdings Co agreed to pay last week. EDF already owns 9.5 per cent of Constellation. (See: Warren Buffett's MidAmerican Energy acquires Constellation Energy for $4.7 billion)

Constellation Energy chief executive Mayo Shattuck, told analysts on Monday that his company had accepted the offer from the Berkshire Hathway unit as it considered that to be the best offer on hand.

As per the agreement, announced on 18 September, MidAmerican Energy Holdings Co will pay $1 billion in cash today, to acquire 19.9 per cent stake in Baltimore-based Constellation. The acquisition would make the Buffet outfit the largest single shareholder in Constellation, displacing EDF.

The acquisition of a 19.9-per cent stake in Constellation would be made by exchanging preferred stock convertible to 10.4 per cent of voting equity and 5.6 per cent of non-voting equity convertible to voting equity and $750 million of senior notes paying 10 per cent interest.

Paris-based EDF said in a public filing that its offer was far superior to that of MidAmerican even 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 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.''

EDF, meanwhile, said the Constellation board didn't respond to its request to make a counterproposal before signing a definitive merger agreement with MidAmerican on 19 September.

MidAmerican, which has the backing of Berkshare Hathway, sought no financing contingencies and injected $1 billion in cash immediately to shore up Constellation's energy-trading business, Shattuck said. Berkshire Hathaway has the highest of 10 investment-grade credit ratings by both S&P and Moody's Investors Service.

An acquisition by the American firm also offered better prospects for regulatory approval than a foreign buyer would have for a utility owner with three nuclear power plants, analysts said.

Constellation shares which plunged last week amidst the financial market meltdown rose $1.44, or 5.6 per cent, to $27.20 in New York Stock Exchange composite trading. EDF fell 0.7 per cent to 50.49 euros in Paris.

EDF, which is also targeting the acquisition of British Energy Group Plc, the UK's largest nuclear power producer, raised its offer for the power utility by 1.2 per cent to $22.6 billion (12.4 billion pounds), or 774 pence a share.
 
British Energy had on 31 July rejected a 765 pence a share offer from EDF because its biggest private shareholders said the bid undervalued its eight nuclear stations and adjacent land.