Roundup: Constellation, Chevy Chase, CarMax, Carlyle
From staff and wire reports
*French energy company Electricite de France said it is dropping its bid for Constellation Energy Group because of the global credit crisis. EdF said it still hopes to develop four new nuclear reactors in the United States and is studying other options.
The boards of both Constellation and MidAmerican Energy Holdings, a unit of Warren Buffett's Berkshire Hathaway, have approved Constellation's sale to MidAmerican for $4.7 billion. EdF, which already owns 9.5 percent of Constellation stock and is a leading nuclear power producer in Europe, had called Buffett's offer inadequate and offered $35 per share.
*Provident Bankshares of Baltimore said it has agreed to acquire the deposits at seven Chevy Chase Bank branches in Giant Food stores. The $42 million in deposits are at Giants in the Baltimore area. Provident said in a statement that the deal "enhances Provident's positions as the premier local bank in the Baltimore area."
Chevy Chase said in July that it was closing its 54 branches in Giant stores, saying customers were more comfortable doing banking online or at standalone branches.
The deal is expected to close in January, Provident said.
*Auto retailer CarMax of Richmond said it is considering shifting lending from its financing arm to outside lenders to reduce the impact of the credit crunch on the company's profit. The company's $1.4 billion warehouse credit facility would last through February under CarMax Auto Finance's current loan practices, Joe Kunkel, senior vice president for marketing and strategy, said at the Wachovia Consumer Growth Conference in New York.
But if the credit market doesn't start to loosen up, "instead of CAF being the lender of first resort, CAF maybe will become the lender of last resort," Kunkel said, adding that the company's higher cost of credit has offset any gains from interest rate reductions by the Federal Reserve.
*Carlyle Group of the District said it intends to bid "for all or part of the business and assets constituting the investment management division" of Lehman Brothers and that it is working with Jeffrey Lane, the former chairman and chief executive of Neuberger Berman, on the matter.
Lehman in September agreed to sell the business, including the Neuberger Berman division, to Bain Capital and Hellman & Friedman in a deal that values the operation at $2.15 billion. Sales of assets in bankruptcy are typically subject to higher offers at a court-supervised auction.
Lehman shouldn't solicit clients' approval for the Bain/Hellman & Friedman sale before an auction, Carlyle said. This court-sanctioned process "can have no result other than to lock in the stalking horse as the prevailing bidder," the private-equity firm said. "The court should eliminate the Bain/Hellman & Friedman thumb on the scale."
*Fairfax-based Brookfield Homes said Paul Kerrigan is stepping down as chief financial officer at the end of November for personal reasons. Craig Laurie, former CFO of Brookfield Properties, will take that position.
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