Agreement withdrawn
Texas utility has formally ended its merger agreement with Jupiter-based NextEra Energy.
With a new suitor at its side, the parent company of Texas’ largest regulated utility has formally ended its merger agreement with Jupiter-based NextEra Energy.
In a filing with the Securities & Exchange Commission on Monday, NextEra said it received notice from Energy Future Holdings Corp., bankrupt parent company of Oncor Electric Delivery Co., terminating the companies’July29,2016, merger agreement.
Oncor’s parent sent the letter last Thursday, a day before Warren Buffett’s Berkshire Hathaway Energy announced a deal to buy Oncor in a transaction reportedly worth more than $17.5 billion.
AlsoMonday, Reuters reported that Oncor’s largest creditor, Elliott Management, was assembling a competing bid for the companyworth $18.5 billion.
NextEra’s bid was worth $18.7 billion, but Texas’ three-member Public Utility Commission rejected it, saying NextEra refused to drop its insistence on controlling Oncor’s board of directors. The Texas regulatorswant Oncor to retain an independent oversight board to protect the company from assuming too much debt from any acquirer. A board currently shields Oncor from bankruptcy debt of Energy FutureHoldings.
Oncor, based in Dallas, does not produce electricity but delivers power to more than 3.4 million homes and businesses through about 122,000 miles of transmission and distribution lines.
In a response to Energy Future Holdings’ merger termination notice, NextEra signaled it might not be finished with thematter.
NextEra said it does not agree that a provision of the companies’ merger agreementcitedbyEnergyFuture Holdings “represents a valid or effective termination of the Merger Agreement” or that other bases exist for termination.
NextEra said it “hereby expressly reserves [its] rights in all respects.”
Reached Monday afternoon by email, NextEra spokesman Rob Gould declined to clarify the points of dispute over the termination notice, saying only that NextEra is letting “thedocument stand on its own.”