The Morning Brief: Elliott’s Singer May Be Planning to Challenge Buffett

July 10, 2017   Stephen Taub

The activist firm and the Oracle of Omaha may be squaring off over Energy Future Holdings.

It looks like there may be a showdown between Warren Buffett and Elliott Management’s Paul Singer. The two financial icons are gearing up to tussle over Energy Future Holdings, the parent of Oncor Electric Delivery Co. The Oracle of Omaha agreed on Friday to acquire the Texas power transmission company for $9 billion in cash. However, Elliott, the largest creditor of the company formerly known as TXU, is planning to put together its own bid, according to a Reuters report. Elliott plans to convert its debt and raise new equity financing, according to the report. TXU went bankrupt after it was acquired for $45 billion in a leveraged buyout in 2007 by KKR & Co, TPG Capital Management, and a unit of Goldman Sachs Group.

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Shares of Buffalo Wild Wings fell 1.14 percent, to close at $124.25. The stock continues to trade around $10 or so below what Mick McGuire III’s Marcato Capital Management paid for the shares, even though it recently won three seats on the board of directors. On Friday UBS gave the stock a vote of confidence when it maintained its buy recommendation and $175 target price. In a note to clients, the investment bank said the casual dining chain remains positioned for continued mid-single digit unit growth, which is slightly above the consensus. "Brand relevancy, above average growth potential, and upcoming catalysts support a favorable risk/reward," it added.

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So much for the Sears Holdings rally. Shares of the flailing retailer fell nearly 2 percent, to close at $7.78, after it announced another round of store closings at both Kmart and Sears. The company is now planning to close more than 300 stores this year. The stock is now down 16 percent since its late June surge.



 


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