Sempra Trumps Suitors with $9.45B Offer for Oncor

CEO Warren Buffett plays bridge during the Berkshire annual meeting weekend in Omaha Nebraska U.S. on May

The new proposal would see Sempra own 60% of a restructured Energy Future business and in a statement it noted that the deal had a transaction value of almost US$19bn including Oncor's debt, which will be assumed by Sempra.

Energy Future's board favored Sempra's bid after it also offered assurances it could get its acquisition of Oncor approved by Public Utility Commission of Texas, as well as a US bankruptcy judge, the sources said.

Berkshire, which made the offer to Oncor in order to step up its pursuit of steady profits from utilities and infrastructure deals, did not immediately respond to a request for comment.

Sempra's bid marks yet another twist in the fate of Energy Future, which was acquired by private equity firms in 2007 for a record-setting $45 billion - but quickly ran into trouble under a huge debt load.

Elliott voiced its support of the Sempra deal Monday, saying in an emailed statement it provides "substantially greater recoveries" to all Energy Future creditors than Berkshire's offer. Among Sempra's holdings is San Diego Gas & Electric and Southern California Gas. Sempra shareholders would own roughly 60 percent of the reorganized company following the transaction. Buffett is known for shying away from bidding wars. A judge was scheduled to consider Berkshire's offer during a US bankruptcy court hearing in Wilmington, Delaware, on Monday.

Berkshire Hathaway Energy owns a portfolio of locally managed businesses that share a vision for a secure energy future, make sustainable investments to achieve that vision and had $85 billion of assets as of December 31, 2016.

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In May 2016, an $18 billion deal to buy Oncor led by Dallas billionaire Ray Hunt fell apart over regulatory concerns.

Dallas-based Oncor serves nearly 10 million customers and operates more than 170,590 kilometres of distribution lines. In response to Sempra's move, however, Berkshire said it would allow Energy Future to keep an Oncor dividend, but that proposal was not enough to bridge the gap in price, according to the sources. Oncor holds the Texas energy transmission assets of bankrupt giant Energy Futures Holdings.

"It is important for Oncor to remain financially strong", Reed said.

The transaction of the largest power distribution/transmission system in Texas should be accretive beginning next year, Sempra officials said. Allen Nye, now Oncor's general counsel, would be named the utility's CEO, according to a press release.

In response to the Sempra bid, Berkshire Hathaway CEO Greg Abel said he was disappointed, but said the company still would be looking for opportunities.

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