Elliott Management Weighs Rival Offer for Energy Future's Oncor, Sources Say
Hedge Fund Elliott Management Corp., unsatisfied with Berkshire Hathaway Inc.'s $9 billion deal to buy electricity-transmission business Oncor, is considering making a competing bid, according to people familiar with the matter.
Elliott is the biggest bondholder of bankrupt Energy Future Holdings Corp., which owns an 80% stake in Oncor, and agreed to sell itself to Warren Buffett's Berkshire on Friday. Court papers indicate that Paul Singer's $33 billion hedge fund is already in position to potentially bottle up Berkshire's deal in bankruptcy court, or put together a better offer.
Berkshire's deal is for $9 billion in cash in exchange for Energy Future, which would net it the stake in Oncor, the largest utility in Texas and one of the biggest power-transmission systems in the county. That is less than Energy Future needs to pay off creditors and end its bankruptcy, which is now in its fourth year. The company has already seen the collapse of two previous efforts to sell Oncor, its crown jewel.
Unless the Berkshire offer is improved or bested, Elliott could be looking at significant losses, according to other people familiar with the matter. Elliott ran up a big stake in Energy Future's debt in recent months, as other funds retreated in the face of failed efforts to sell the energy-transmissions unit. Reuters first reported Elliott was considering a bid for Oncor.
Write to Peg Brickley at peg.brickley@wsj.com and Soma Biswas at soma.biswas@wsj.com
(END) Dow Jones Newswires
July 07, 2017 18:27 ET (22:27 GMT)