Elliott challenges Berkshire Hathaway bid for Oncor

Hedge fund Elliott Management bought a package of debt allowing it to challenge Berkshire Hathaway’s bid to buy transmission company Oncor Electric Delivery.

Berkshire Hathway‘s bid for Oncor, part of the restructuring of the bankrupt Energy Future Holdings, amounts to $9.3 billion in cash. EFH has been in bankruptcy for several years amidst several failed acquisition bids by other companies.

The company, owned by investor Warren Buffett, said late last month that it would walk away from the bid if it is not approved by Monday.

Elliott is EFH‘s largest creditor, and has said Berkshire’s purchase price undervalues both Oncor and EFH.

Berkshire, for its part, said Wednesday that its bid was sound and would not be increased.

Elliott prices Oncor at $18.5 billion, including the debt, while Berkshire values the company at $18.1.

Berkshire said its bid has the support of a dozen stakeholders in Texas, as well as several dozen regulatory commitments.

Hunt Consolidated and utility holding firm NextEra Energy Inc. previously made serious runs at Oncor, for close to $20 billion and $18 billion, respectively. Both acquisitions were scuttled by Texas regulatory concerns.

Des Moines, Iowa-based Berkshire Hathaway Energy holds $85 billion in assets that provide power to more than 11 million customers, including utility MidAmerican Energy, PacifiCorp, NV Energy and Northern Powergrid.

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