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Elliott offers $18.5bn for Oncor to challenge Berkshire's bid

EBR Staff Writer Published 11 July 2017

Elliott Management has revealed its proposal to acquire Oncor Electric Delivery Company in a deal worth $18.5bn from Energy Future Holdings (EFH), challenging a bid made by Berkshire Hathaway Energy recently.

The amount offered by the activist hedge fund exceeds last week’s $18.1bn worth deal inked by EFH with Warren Buffett’s Berkshire Hathaway Energy.

Elliott Management has also been the largest creditor of the bankrupt EFH for which it has offered to acquire at nearly $9.3bn compared to the $9bn amount agreed by Berkshire Hathaway.

In a letter written to EFH, Elliott stated that it will completely support the former’s transaction with Berkshire or any other party provided that it is more than the value proposed by it. The activist hedge fund concluded that the offer from Berkshire does not meet such value.

Elliott wrote: “We are extremely concerned that introducing a transaction with Berkshire at the current time will significantly undercut and potentially limit Elliott’s ability to provide a portion of the financing necessary to achieve the higher and otherwise superior transaction Elliott has proposed.”

Both the bids from Berkshire Hathaway and Elliott are below the $18.7bn offered by Florida utility NextEra Energy. However, NextEra Energy's deal faced rejection from the Texas regulators for a second time in June. 

In August 2016, NextEra agreed to purchase an 80% stake in Oncor from EFH. The sale was part of EFH’s restructuring plan to exit bankruptcy.

Headquartered in Dallas, Texas, Oncor is an electric transmission and distribution service provider that serves 10 million customers across Texas. Its distribution and transmission system consists of about 122,000 miles of lines and more than 3.4 million meters.


Image: Elliott Management plans to buy Oncor for $18.5bn. Photo: courtesy of sirirakphotos/FreeDigitalPhotos.net.