Dive Brief:
- Energy Future Holdings is now considering an offer from Hunt Consolidated to purchase its Oncor Electric Delivery company, in addition to the previous bid from NextEra and potential interest from a Fidelity-led group of creditors.
- While NextEra's $18 billion bid had initially appeared to lead the pack, Hunt's proposal may be more lucrative and expedient, assuming Texas regulators are on board with turning Oncor into a real estate investment trust.
- The Dallas Morning News reports the parties are due back in court July 13 to determine the next steps in auctioning Oncor.
Dive Insight:
Two weeks ago the future of Oncor Electric Delivery seemed like it might be straightforward. NextEra, which already operates Florida Power & Light and is attempting to buy Hawaiian Electric, had taken the lead with an $18 billion offer and Energy Futures seemed ready to name it the lead bidder. But now Hunt's proposal has muddied the waters, and Dallas Morning News reports Fidelity is working with a group to make a bid of its own.
According to the newspaper, also involved in Hunt's bid are: BlackRock Financial Management, Anchorage Capital and Arrowgrass Capital.
Hunt's proposal is potentially a quicker way through the bankruptcy proceeding, because it would take both Oncor, the power line company, and Energy Future's generation assets as well. Hunt and smaller creditors would take Oncor, and other lenders would take money-losing generation assets. But for that deal to move forward, Texas regulators would need to approve operating Oncor as a real estate investment trust, which would be a first for a large utility in the United States.
Oncor, the prized asset of Energy Future's holdings, is the largest transmission and distribution utility in Texas and generated about $15 billion in annual earnings last year.
