Author Topic: Largest Texas Energy Company TXU Now Private via Major Buyout  (Read 600 times)

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Offline Britney_Hole

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Largest Texas Energy Company TXU Now Private via Major Buyout
« on: February 26, 2007, 08:37:51 AM »
BBC 26FEB2007
Record private equity buyout made
A consortium including Texas Pacific, Kohlberg Kravis Roberts and Goldman Sachs has bought out the US utility TXU in a deal worth $45bn (£22.9bn).
TXU is the top power company in Texas and the deal breaks the record for the biggest takeover by private equity.

The new owners say they will strengthen TXU's environmental policies and protect prices until September 2008.

Private equity companies use clients' money and borrowed money to buy whole companies and try to turn them around.

The deal values TXU at $32bn, or $69.25 per share, while the private equity buyers will also assume $13bn in debt.

Third record in four months

TXU shares rose 6.6% on Thursday and Friday on rumours of a deal.

It is the third time in four months that the record has been broken, most recently with Blackstone's $38.9bn offer for Equity Office Properties.

The new owners are scaling back TXU's $10bn plan to build 11 new coal-fired power stations and will only build three.

A group of investors had been criticising the price-tag on the new stations, saying that TXU would end up paying more as emissions became more tightly regulated.

TXU has prospered in recent years, because most of its energy is generated using coal and nuclear power, but Texas electricity prices are tied to the price of natural gas.

Five things we never see in America
1. Bicycle lanes
2. Teacher run schools
3. Cooperatively owned businesses
4. Recycling
5. Use of alternative energy