In Big Buyout, Utility to Limit New Coal Plants

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In Big Buyout, Utility to Limit New Coal Plants

By FELICITY BARRINGER and ANDREW ROSS SORKIN
Published: February 25, 2007

Under a proposed $45 billion buyout by a team of private equity firms, the TXU Corporation, a Texas utility that has long been the bane of environmental groups, will abandon plans to build 8 of 11 coal plants and commit to a broad menu of environmental measures, according to people involved in the negotiations.

The roster of commitments came through an unusual process in which the equity firms asked two prominent environmental groups what measures could be taken to win their support. The result is an about-face from the company’s earlier approach to climate-change issues, and includes a goal of returning the carbon-dioxide emissions by TXU to 1990 levels by 2020.

Environmental groups said yesterday that they had never known of a financial deal with such an ambitious built-in environmental component.

Two private equity firms, Kohlberg Kravis Roberts & Company and the Texas Pacific Group, have proposed to buy TXU in what would become the largest leveraged buyout ever....>

http://www.nytimes.com/2007/02/25/business/25coal.html?ex=1173157200&en=dc796004cfbf08bb&ei=5070&emc=eta1

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Feb. 26, 2007, 12:04PM
TXU's board OKs $32 billion private buyout


By DAVID KOENIG
Associated Press

DALLAS — TXU Corp., Texas' largest electricity producer, said today it has agreed to be sold to a group of private-equity firms for about $32 billion in what would be the largest private buyout in U.S. corporate history if shareholders and regulators go along.

Kohlberg Kravis Roberts & Co. and Texas Pacific Group led a group that included Goldman Sachs & Co. and three other Wall Street firms that will pay $69.25 per share for TXU. They will also assume about $13 billion in debt.

The firms won support for the buyout from some environmentalists who have criticized TXU by agreeing to sharply scale back TXU's controversial $10 billion plan to build 11 new coal-fired power plants that would produce tons of new greenhouse gas emissions.

They also agreed to cut electricity prices 10 percent, which they said would save TXU residential customers more than $300 million per year, and limit prices until September 2008.

TXU directors voted Sunday night to recommend that shareholders approve the sale. The price represents a 15 percent premium to TXU's closing stock price on Friday. TXU shares rose $7.77, or 13 percent, to $67.79 in morning trading on the New York Stock Exchange after reaching a 52-week high of $68.15...>

http://www.chron.com/disp/story.mpl/front/4581148.html