Dive Brief:
- Bloomberg reports that Berkshire Hathaway has submitted a bid to purchase Oncor, valued at $18 billion, out of Energy Future Holdings' bankruptcy, citing sources familiar with the discussions.
- Energy Future said in a filing for the bankruptcy court last week that it is in discussions with multiple parties, but did not provide details.
- Other potential bidders include NextEra Energy, Edison International and two companies which jointly already own almost 20% of Oncor, Borealis Infrastructure Management and GIC Special Investments.
Dive Insight:
The list of potential suitors for Oncor, the largest utility in Texas, continues to grow and now has Warren Buffett's name at the top with NextEra, according to Bloomberg.
“Buffett has been clear that he likes infrastructure plays in general and he likes utilities,” according to Bloomberg Intelligence analyst Kit Konolige. “They have stable cash flows and they pay dividends. He would appear to believe they are not going away anytime soon.”
Speculation over potential bidders has been growing since Hunt Consolidated's plan for the utility came undone earlier this year. Hunt's bid for the company was approved by state regulators, but was contingent on several conditions. The deal subsequently fell through.
Hunt's proposal would have operated Oncor as a Real Estate Investment Trust, but regulators said the plan could only move forward if the tax savings were shared with consumers.
The Borealis-GIC group already owns 19.75% of Oncor, and sources told Bloomberg they are interested in acquiring the balance. The stake was purchased eight years ago for $1.25 billion.
Earlier reports placed NextEra Energy as leader among seven bidders. The company was the original favorite to acquire Oncor last year, before Hunt's proposal to operate the utility as a REIT was introduced.
