Dive Brief:
- From a field of several companies, NextEra Energy has emerged as the frontrunner to acquire Oncor Electric Delivery Co. out of bankruptcy, Bloomberg Business reports.
- CenterPoint Energy Inc., Berkshire Hathaway and Hunt Consolidated have all been mentioned as potential suitors for the company, but sources close to the deal say NextEra could be tapped as the stalking horse within the next few weeks.
- Energy Future Holdings, Oncor's parent company, filed for Chapter 11 last year and is now trying to sell its 80% stake in the Texas utility, which many investors view as a blue chip company and has been valued at about $18 billion.
Dive Insight:
Several companies have indicated an interest in purchasing Oncor, and Hunt Consolidated earlier this week was the subject of an SNL story indicating it would consider converting the utility into a real estate investment trust. But Bloomberg reports NextEra Energy may be leading the pack of potential suitors, and could be tapped within the next few weeks as the so-called "stalking horse" bidder helping set the value of the company.
“NextEra has already done some transmission in Texas and they feel like they have some institutional knowledge in the state," Bloomberg Intelligence utility analyst Kit Konolige said in an interview with the outlet.
While Oncor operates in the Lone Star state, so far NextEra has shown a willingness to venture outside of its home territory of Florida (where it owns Florida Power & Light) for regulated utility buys. The clean-energy leader is also attempting to purchase Hawaiian Electric Industries for about $4.3 billion.
An initial 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 utility, the largest transmission and distribution utility in Texas, serves more than 3 million homes and has about $15 billion in annual earnings.
