Electricite de France SA, the world's largest nuclear power company, has offered to buy a 50 per cent stake in Constellation Energy Group Inc's  nuclear business for $4.5 billion, to trump a $4.7 billion takeover by Warren Buffett's MidAmerican Energy Holdings Co.

The bid, which values Constellation at around $52 per share - a 96 per cent premium to the proposed MidAmerican offer - includes an up-front $1 billion cash investment in Constellation and an option to sell up to $2 billion of non-nuclear generation assets to EDF.

The offer, made through EDF subsidiary EDF International, proposes to acquire through a joint-venture a 50 per cent ownership interest in Constellation's nuclear generation and operation business for $4.5 billion.

The cash investment of $1 billion will be credited against the purchase price for EDF's interest in the nuclear generation business.

EDF expects to get the necessary regulatory approvals for the acquisition and close the transaction within six to nine months, upon Constellation's termination of its proposed transaction with MidAmerican Energy Holdings Company and execution of a definitive agreement with EDF.

Berkshire Hathaway Inc subsidiary MidAmerican agreed to buy Constellation in September, rescuing it from the brink of bankruptcy. It also gave the power company an immediate $1 billion cash infusion.

Constellation faced liquidity issues due in part to ties of its trading business to Lehman Brothers, and its shares fell as low as $16.70, down from nearly $108 in January.

If the deal falls through, Constellation would have to issue about 20 million common shares to MidAmerican, or about 9.9 per cent of its outstanding shares and pay it about $593 million in cash.

The company would also have to issue $1 billion in 14 per cent senior notes to MidAmerican, due to be repaid in December 2009.

Constellation shareholders are set to vote on the deal on December 23.

The EDF Group, one of the leaders in the energy market in Europe, is an integrated energy company active in all businesses: production, transport, distribution, energy selling and trading.

In France, it has mainly nuclear and hydraulic production facilities where 95 per cent of the electricity output involves no CO2 emissions.  The group is involved in supplying energy and services to more than 38 million customers around the world, including more than 28 million in France.

The group generated consolidated sales of 59.6 billion euro in 2007, of which 44 per cent were in Europe excluding France. EDF is listed on the Paris Stock Exchange and is a member of the CAC 40 index.