Dive Brief:
- Hunt Consolidated and a group of smaller creditors are joining forces to buy the assets of bankrupt Energy Futures Holding (EFH), The Dallas Morning News reported, possibly reorganizing the company as a real estate investment trust.
- NextEra had been considered the lead bidder and likely stalking horse for Oncor Electric Delivery, but Hunt's bid could upset the process.
- EFH filed for Chapter 11 last year and is now trying to sell its 80% stake in Oncor, which some investors see as a coveted asset valued at about $18 billion.
Dive Insight:
Last week NextEra looked to be in the lead spot to acquire Oncor, but The Dallas Morning News reports Hunt Consolidated has teamed up with a group of lesser creditors to put in its own bid. According to the newspaper, which quoted a source familiar with the deal, Hunt and smaller creditors would take Oncor and other lenders would take the generation assets, which are losing money.
The new company would be organized as a real estate investment trust and would own all of Oncor.
Sources familiar with the deal said NextEra made an offer of about $18 billion, but Hunt's proposal could complicate matters because EFH will either need to sell Oncor and its generation assets in separate deals or decide to finish the bankruptcy proceedings at once.
Hunt's proposal is intended to end the bankruptcy proceeding in one move, and calls for roughly $5 billion in new debt, Morning News reported.
An early plan to reorganize the Energy Future's debt fell apart when NextEra made its bid for the company, prompting Oncor to go the stalking-horse auction route. The company was initially valued between $15 billion and $16 billion, but some estimate its value could approach $20 billion in a bidding war. The company is the largest transmission and distribution utility in Texas, serving more than 3 million homes and generating about $15 billion in annual earnings.
