Hostile takeover of PG&E? Billion-dollar hedge funds duel over bankrupt utility

Two groups of multibillion-dollar hedge funds are fighting over control of PG&E Corp. in a battle with huge implications for California’s largest electric utility and the thousands of wildfire victims who hold claims against the bankrupt company.

What had been a quiet tug-of-war turned into a hostile takeover battle late Wednesday. PG&E’s major bondholders, in a filing in U.S. Bankruptcy Court, said they’re seeking to buy 85 percent of the utility’s stock for $19 billion. The effort is part of a larger reorganization proposal that would include paying billions to victims of the 2017 and 2018 wildfires.

“They want to own the company essentially,” said Michael Wara, director of Stanford University’s Climate and Energy Policy Program and an advisor to the state Senate on wildfire issues.

PG&E’s existing shareholders, led by a competing group of hedge funds, are sure to fight the plan, as they would see their holdings significantly dwindle in value if the bondholders succeed in gaining control.

Late Thursday, PG&E responded to the bondholders’ plan with a court filing saying the proposal comes up billions of dollars short of what’s needed to pull the utility out of bankruptcy. It criticized the bondholders for undermining PG&E’s efforts to reorganize — and to try to seize control of the company “at a significant discount.”

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Hostile takeover of PG&E? Billion-dollar hedge funds duel over bankrupt utility, by Dale Kasler, The Sacramento Bee, July 18, 2019.

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