The energy unit of Warren Buffett`s Berkshire Hathaway Inc said on Wednesday it will "stand firm" on its $9 billion offer to acquire 80 percent of Oncor Electric Delivery Company LLC and will not increase its offer.
Elliott Management Corp, the largest creditor of Oncor`s bankrupt parent Energy Future Holdings Corp, has tried to best Berkshire`s offer for the Texas utility with a $9.3 billion proposal.
Including debt, Elliott`s offer values Oncor at $18.5 billion, above Berkshire`s $18.1 billion valuation.
Elliott, which already owned a major position in the biggest block of debt of Energy Future, has now purchased a slice of a different class of debt that would ensure the hedge fund`s ability to block Buffett`s deal, the Wall Street Journal reported on Wednesday.
The fund`s new purchase is in an impaired class of notes, meaning it won`t be paid fully in the restructuring, and its approval is likely needed to get a deal done, the WSJ reported, citing people familiar with the matter.
A U.S. bankruptcy judge in July gave Elliott until Aug. 21 to formalize its plans to bid on Oncor before the court approves the offer for the utility from Berkshire.
"We`re committed to being an exceptional long-term partner in Texas and our simple, straightforward deal is good for Oncor, its customers and the state," Berkshire Hathaway Energy Chief Executive Greg Abel said in a statement.
Oncor was not immediately available for comment on the Berkshire statement or the Journal report. Elliott also could not be reached for comment outside regular U.S. business hours.
Berkshire`s bid for Oncor includes 47 regulatory commitments that have the support of 12 key stakeholder groups across Texas, the company said.
"Oncor is a strong company with values, management and employees that will fit well with Berkshire Hathaway," said Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc.
Berkshire`s merger agreement with Oncor carries a $270 million termination fee should the deal fall through.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)