Hedge fund makes move to block Berkshire's bid for Oncor Electric

Elliott Management has bought debt in the parent company of Oncor Electric Delivery in its latest bid to block Berkshire Hathaway’s $9 billion offer for the state’s largest power distributor, according to people familiar with the matter.

Paul Singer’s firm acquired about $60 million of leveraged buyout notes in Oncor’s bankrupt parent from Fidelity Investments, said one of the people, who asked not to be identified. Buying the notes means Elliott and Sunrise Partners, which also opposes Berkshire’s offer valued at $18.2 billion including debt, own the majority of every class of impaired credit in the holding company, the person said.

Bankruptcy courts typically require only one impaired creditor to support a deal for it to proceed. By acquiring the Fidelity notes, Elliott believes it will be able to block the deal by acting as a dissenting impaired creditor, the person said.

Elliott has said Berkshire’s deal doesn’t value the company enough in the credit holders’ perspective.

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