Electricite de France (EDF) is buying Eagle Energy Partners from bankrupt Lehman Brothers Holdings Inc., EDF Trading, a subsidiary of the French utility giant, said on Monday. Eagle’s future has been in question since the company was excluded from a recent deal in which Barclays Capital Inc. acquired Lehman Brothers Inc. for $1.75 billion.
Eagle, a Houston-based wholesale gas and power marketer, is just the latest enterprise to be targeted by EDF as the international conglomerate seeks bargains in an energy patch rocked by troubles on Wall Street and beset by credit worries.
EDF Trading, which is owned 100% by EDF Group, trades in the international wholesale energy markets, buying and selling electricity, emissions, natural gas, coal, freight, biomass and oil, according to the company’s website. EDF Trading is one of the largest electricity traders in Europe, a leading European gas trader and one of the first traders to move into the global market for liquefied natural gas, it says.
EDF, Europe’s largest power producer, made a competing offer for Constellation Energy Group after a bid for the company was announced by MidAmerican Energy Holding Co. EDF International, a subsidiary of EDF SA, submitted a joint offer of $35/share together with Kohlberg Kravis Roberts & Co. LP and TPG Capital LP (see Daily GPI, Sept. 23a). Shareholders are now suing over the less-generous MidAmerican-Constellation deal (see Daily GPI, Sept. 26). EDF also has made a $22.9 billion bid for British Energy Group Plc, which among other things is the United Kingdom’s largest producer of nuclear power.
The removal of Eagle from the Barclays deal came among several other changes prior to its approval by Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York earlier in September (see Daily GPI, Sept 23b). Eagle Energy executives have not responded to calls from NGI.
Bentek Energy LLC recently noted in a pipeline capacity report that Eagle holds 60 transportation contracts on 12 pipelines and storage facilities for a total maximum daily quantity of 1.2 MMDth/d. “Over half of that total is on TransCanada’s ANR system, associated with market-area storage capacity,” Bentek said. TransCanada was one of numerous intervenors in the Lehman bankruptcy and sought to block the sale of Eagle to Barclays because the transaction might have given Barclays the ability to reject Eagle contracts even though Eagle itself has not declared bankruptcy.
Lehman acquired the two-thirds of Eagle that it did not already own in May 2007 (see Daily GPI, May 10, 2007) after it acquired its first third of Eagle in 2006 (see Daily GPI, March 28, 2006). Eagle was formed by former Dynegy executives in 2003 (see Daily GPI, July 2, 2003) and manages and optimizes supply, transportation, transmission, load and storage portfolios on behalf of wholesale natural gas and power clients.
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