Dive Brief:
- NextEra Energy has renewed its interest in purchasing Oncor out of the Energy Future Holdings bankruptcy proceeding, and now leads seven potential bidders in a deal that could be wrapped up next month, according to Bloomberg.
- Hunt Consolidated's bid for the utility stumbled when Texas regulators placed conditions on a proposal to operate the utility as a Real Estate Investment Trust. NextEra's latest proposal would drop the REIT operating strategy.
- Berkshire Hathaway and Edison International are also said to be in the running. NextEra's offer is reportedly higher than Hunt's previous bid.
Dive Insight:
A year ago, NextEra led bidders for Oncor until Hunt's proposal to operate the utility as a REIT took center stage, promising to save investors hundreds of millions. But when Texas regulators attached conditions to their approval of Hunt's bid to share those savings with ratepayers, the deal collapsed.
While the Hunt-led group of creditors is now suing to possibly keep its bid alive, it appears other parties have moved on. Seven companies are now interested in purchasing Oncor, Bloomberg reported, with NextEra back at the top of the pack. NextEra had revealed its renewed interest in purchasing Oncor in May.
The deal could value Oncor at $17 to $18 billion, and sources close to the deal say NextEra's proposal is higher than the failed Hunt bid, according to Bloomberg.
Hunt's plan had appeared close to completion, with Texas regulators approving the deal, until conditions attached to the arrangement soured investors. The biggest concern among regulators was a possible transfer of $250 million in tax savings from ratepayers to investors. Hunt requested a rehearing after the PUCT issued its decision, and later withdrew its bid in May, filing a lawsuit against the Texas regulators a month later. Bloomberg notes the lawsuit may undermine other offers Oncor is considering, including NextEra.
