Does Buffett's MidAmerican Maneuver Mean the Electricity Business is Sexy Again?

Wall Street analysts have been falling all over themselves in the wake of the announcement that Warren Buffett's Berkshire Hathaway (BRK.A Quote) was joining forces with Berkshire board member Walter Scott and MidAmerican Energy Holdings (MEC Quote) Chairman David Sokol in a bid to take the Iowa-based electric utility private.

Morning calls along the Street have been littered with utility analysts talking up the positive impact Buffett could have on the industry. Several firms, including Schroders and Donaldson, Lufkin & Jenrette have issued positive comments on the industry based on the news.

But while eager to characterize the deal as St. Warren blessing the undervalued utility sector, Wall Street's pitches miss the point: Buffett is not a sector investor, he is a company investor. And he wants to buy this company because of the principals involved. The deal is the result of a long-lasting relationship with Walter Scott, who is also MidAmerican's largest individual shareholder, and Scott's connection to Sokol. And the fact that all three hail from Omaha. ...