Elliott Management Corp, the largest creditor of the bankrupt parent of Oncor Electric Delivery Co, is exploring putting together a bid for the Texas power transmission company that would top Warren Buffett’s $9 billion all-cash deal, people familiar with the matter said on Friday.
If Elliott, the hedge fund run by billionaire Paul Singer, proceeds with such a bid, it 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.
Elliott would seek to convert its debt in the company to equity, as well as raise new equity financing for its bid, the sources said. As with Buffett’s deal, a bankruptcy judge would have to approve Elliott’s alternative plan.
Elliott’s stance illustrates the complexities of acquiring companies whose debt is trading at distressed levels. SoftBank Group Corp Chief Executive Masayoshi Son, another famed dealmaker, saw the $14 billion merger between the Japanese company’s satellite startup OneWeb and debt-laden peer Intelsat SA collapse last month after many of the latter’s creditors refused to back the deal.
The hedge fund believes it can put together a higher offer than the deal announced on Friday by Buffett’s Berkshire Hathaway Inc, which has a total value of $18.1 billion including debt, the people said. (Reuters)
