© 2016 The Texas Lawbook.
By Mark Curriden
(July 29) – Energy Future Holdings General Counsel Stacey Dore and lawyers at Kirkland & Ellis worked all night negotiating the final terms of a definitive agreement to sell Oncor to NextEra Energy for $18.4 billion.
EFH agreed to sell its power transmission company as part of its $50 billion bankruptcy and restructuring.
By 9 p.m. last night, the winner was clear. Juno Beach, Fla.-based NextEra agreed to acquire Dallas-based Oncor for $18.4 billion, but it still took another seven hours – at 4:10 a.m. – before the deal was done.
EFH on Friday informed the U.S. Bankruptcy judge in Delaware of the definitive purchase agreement and the filed a Form 8-K with the U.S. Securities and Exchange Commission.
In the documents, EFH and NextEra expect the transaction to close in the spring of 2017, assuming it survives a handful of hurdles. If EFH walks away from the deal, it must pay a $275 million break up fee.
Lawyers and financial advisers say NextEra’s acquisition of Oncor, which is Texas’ largest regulated utility and the crown jewel of EFH’s assets, is the critic step to allow EFH to emerge from Chapter 11 bankruptcy, where it is trying to restructure about $50 billion in debt.
NextEra is one of the world’s largest power players with annual revenues exceeding $17 billion. The company will reportedly finance the acquisition through cash and debt.
The Texas Public Utility Commission will still need to approve the transaction. The PUC essentially killed EFH’s previous deal with Hunt Consolidated and a group of hedge funds that are major creditors in the EFH bankruptcy because the acquirers wanted to structure Oncor as a tax-free REIT.
The PUC should not be as much of an obstacle with NextEra, which is simply purchasing Oncor and adding it to its $75 billion in current assets.
Dore, according to multiple lawyers involved in the transaction, and Kirkland M&A partner Andrew Calder in Houston, led the negotiations. Other Kirkland lawyers involved in the deal are corporate partner John Pitts and associates Veronica Nunn, James Melchers and David Moore – all from the firm’s Houston office. New York-based Chadbourne & Park is advising NextEra.
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