US: Elliott to Duel Berkshire over Oncor

Elliott Management, the largest creditor of Energy Future, the bankrupt parent of Oncor Electric Delivery, unveiled a plan on Monday to best Berkshire Hathaway in the deal for the Texas utility with a bid worth US$18.5 billion, including debt.

Elliott revealed in documents published on its website it was unhappy with the recovery to some creditors under an US$18.1 billion deal announced by billionaire Warren Buffett’s Berkshire on Friday, July 7. The hedge fund believes its acquisition offer would result in a higher payout to debt holders.

New York-based Elliott’s proposal to acquire Oncor calls for a complex conversion of its debt to equity and for an outside equity partner to help finance the deal. Reuters first reported on Elliott exploring a bid for Oncor on Friday.

The offer from the hedge fund, which says it has more than US$32 billion under management, would be a rare challenge to Buffett, who avoids auctions for companies and has told his investors he does not like to participate in bidding wars. But even without a competing bid, Buffett’s deal faces a difficult road securing the approval of a bankruptcy court judge without Elliott supporting it.

Full Content: Bloomberg

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