Elliott proposes $18.5 billion Oncor deal to top Buffett
Elliott Management Corp., the largest creditor of bankruptcy company Oncor Electric Delivery Co., announced on Monday a plan to better handle Berkshire Hathaway Inc (BRKa.N) for the Texas company with an offer of a value of 18.5 thousand Millions, including debt.
Elliott reveals in the documents posted on his website he was not happy with the recovery of some creditors in the context of a $ 18.1 billion deal announced by billionaire Warren Buffett of Berkshire Friday. The hedge fund believes that its takeover bid would lead to greater payment of the debtors.
Elliott’s proposal in New York to acquire TXU Energy Corp. requires a complex conversion of its debt equity and equity to an external partner to help finance the operation. Reuters reported for the first time on offer Elliott by Oncor Friday.
The hedge fund’s offer, which says it has more than $ 32 billion under management, would be a rare challenge for Buffett, who avoids auctions for companies and told his investors they did not belittle to participate in bidding wars . But even without a competing offer, the Buffett deal is facing a tough road by securing the approval of an unrestricted bankruptcy court judge Elliott.
“We are very concerned that the introduction of a transaction with Berkshire currently significantly reduces and limits Elliott’s ability to provide some of the funds needed to achieve a larger transaction and that is not potentially Elliott proposed,” said the fund Of coverage in a letter from the future Energy Management Board dated July 5 and published Monday.
The Berkshire future supply of energy help its costly bankruptcy, which has been extended for more than three years, while other offers for its crown jewel of Oncor separated. Retail electricity activity and future power generation were separated Oncor and went out of bankruptcy last year.
Elliott, led by billionaire Paul Singer, also revealed on Monday that he would remain in place a structure of “ringfencing” business would be to stop adding debt to Dallas-based Oncor, or excess cash paid as dividends.
The regulators of the state of Texas utility residence demanded such a structure. This was why Florida NextEra Energy Inc’s (NEE.N) supply of 18.7 billion for utility collapsed earlier this year.