Buffett's Berkshire, CenterPoint and NextEra weigh bids for Oncor

Dive Brief:

CenterPoint Energy, NextEra Energy Inc., Hunt Consolidated Inc. and Warren Buffett's Berkshire Hathaway Inc. are among ten companies exploring bids for Texas utility Oncor, Bloomberg reported on Thursday.
Oncor is currently majority-owned by Energy Future Holdings, the largest power company in Texas. Energy Future filed for Chapter 11 bankruptcy in April and is attempting to sell its 80% stake in Oncor as part of its efforts to restructure more than $40 billion in debt.
Oncor, which did not file for bankruptcy, was initially valued between $15-16 billion, but could approach $20 billion in a bidding war, according to the Financial Times.

Dive Insight:

Oncor is the largest distribution and transmission utility in Texas, serving over 3 million homes and delivering about $15 billion in annual earnings. The company is widely seen as a prized asset, with the utility poised to take advantage of population growth in the state and recently announced plans to invest $1 billion annually in power lines through 2018.

NextEra Energy helped prompt the auction for Oncor when it staged a takeover bid earlier this year that valued the company at $17.5 billion. NextEra is the second largest utility company in the U.S. based on its market value of $41.1 billion. Only Duke Energy is bigger.

CenterPoint is smaller, with a market value is $10.3 billion, and provides electricity to over 2 million customers in the Houston area. CenterPoint also owns natural gas utilities in six states.

Warren Buffett's Berkshire Hathaway Energy already owns big utilities in Pacificorp and NV Energy, and recently agreed to purchase Canadian transmission company AltaLink. The Oncor auction will be familiar territory for Buffett, who bought $2 billion worth of bonds connected to Energy Future Holdings before it filed for bankruptcy. He has since written down the securities, calling the move a "major unforced error."

The first round deadline for bids to establish a leading bidder is October 23. Those who make it through the first round must have their refined, second-round bids submitted by November 21.