Buffett buying Baltimore-based Constellation (MD)

Warren Buffett's Berkshire Hathaway Inc. is reaching into its deep pockets to give a steadying hand to Constellation Energy Group Inc. and, at the same time, grab a bargain.

Berkshire's MidAmerican Energy Holdings Co. said Thursday it will buy Baltimore-based Constellation for $4.7 billion and give it an immediate $1 billion infusion after shares of the nation's largest wholesale power seller plummeted and liquidity concerns had analysts worried it would go out of business.

"Obviously we're in unprecedented times," MidAmerican President and CEO Gregory Abel said. "Liquidity and solvency issues are a top priority for many companies. We don't have any of those concerns, again, at MidAmerican and Berkshire."

MidAmerican will pay $26.50 per share in cash for Constellation, well off the utility's 52-week high of $107.97 reached Jan. 8. The shares traded as high as $67.87 last week before hitting a low of $13 on Tuesday.

The companies planned to sign a definitive agreement by the end of business Friday, and Constellation will receive $1 billion by giving MidAmerican preferred equity, the companies said.

The boards of both companies approved the deal, but shareholders and regulators also will have to sign off.

Crap. I own a LOT of that stock. I kept telling myself to dump half of it, to take my profits, but I never actually DO anything about any of my stocks.

I had NO IDEA it had crashed so bad. Wow. Well, I still will get something, apparently, since Buffet is buying me out. But not nearly what I would have gotten if I had sold out half at any of the many times I thought about it.

Oh well.

I’ve owned more than one stock that ran up like a lion only to come down like a crash, without me lifting a finger.

But wow. Just wow.

Oh well. Live and learn, pick yourself up and move on.

We inherited the shares, so it’s free money anyway.

If they were free, why not keep ‘em and see what’s next?

—you can’t sell ‘em at a loss. If you sell them all for a penny, that’s still a gain.

—Buffet just might fix what’s ailing the place, and make ‘em worth more in the process. You think he wants to buy yours in order to let them lose value?

Been wishing I’d bought energy stocks a while back meself.

So far as I can tell, this is a simple buy-out. I’ll get $26.50 for each share I own. Constellation will just be part of the Mid-whatever group now. It won’t be it’s own company.

Constellation was a good company. It’s stock ran up unreasonably high for no good reason I could tell, but had come back down (I don’t watch stocks every day).

I figured it had up and down motion, but never thought it would be caught up in the credit squeeze. They are an energy company, not a bank stock.

I’m certain that Buffet knows the company is worth a lot more than $26.50 a share. But there’s no way I can make money on that, except I guess I could take what he pays me and buy shares in his company.

My mistake, as always was not to diversify. We’ve just held the stock so long that we had a lot of extra shares from dividend reinvestment. At some point I figured I should sell the shares that had been generated, and keep the originals, but while I tried to schedule a review with my advisor about 6 months ago, I’ve never gotten around to finalizing the meeting, much less communicating the thought we might want to sell.

It could be a lot worse. If I had learned my stock was sitting at $24 and dropping, I’d be panicking. But this is more like a finality. I know what the price is, I know I’ll get paid, so I can move on.

At least i didn’t inherit Lehman stock.

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