Elliott Management Corp, the largest creditor of the bankrupt parent of Texas power transmission company Oncor Electric Delivery Co, is exploring putting together a bid for the company that would challenge Warren Buffett’s $9 billion all-cash deal, people familiar with the matter said on Friday. Elliott, the hedge fund run by billionaire Paul Singer, would seek to convert its debt in the company to equity, as well as raise new equity financing for its bid, the sources said. While Elliott believes it can put together a higher bid than the deal announced on Friday by Buffett’s Berkshire Hathaway Inc, it will wait for details on how Berkshire’s deal will affect the company’s creditors before it decides how to proceed, the sources said. Elliott may also seek to use its rights as a creditor to Energy Future Holdings, the parent of Oncor, to block the sale of the company to Berkshire in bankruptcy court, according to the sources. The sources asked not to be identified because the deliberations are confidential. Elliott declined to comment, while Oncor and Berkshire Hathaway did not immediately respond to requests for comment.
Elliott filed a lawsuit in May against Energy Future asking for it to consider debt reorganisation alternatives, including a plan that would involve converting Elliott’s significant debt holdings in the company to equity, eventually putting Oncor under the hedge fund’s control.