Items from the editing room floor: TXU

When it comes to reporting it’s not unusual if less than half of the information one gathers never makes it into a story. Sometimes its minutiae that’s unimportant but often it’s interesting stuff that just doesn’t fit due to lack of space or it would clutter the story and make it unwieldy.
So, here are some items that didn’t make it into the TXU story we ran today:
In emphasizing just how important the environmental groups were to Kohlberg Kravis Roberts & Co. and Texas Pacific Group:

“They told us ‘we’re not going to go forward unless you tell us our commitments on global warming are as good as we say they are,” said Jim Marston, regional director for Environmental Defense, who took part in the negotiations.

State Rep. Sylvester Turner on his concerns about private equity investors buying the company:

“And whoever purchases this investment will then have to recoup their investment to get an added return. And who pays the added cost? Consumers pay the added cost, residential and small businesses,” Turner said.

There were a couple of interesting points made during TXU management’s conference call Monday morning, including a correction of some media reports that the management team was part of the buyout group. That is not the case, noted CEO John Wilder.

“… so we’re effectively available to any investor group” that would make a competing offer, Wilder said.

Competing bids may seem unlikely given the size of the players and the size of the deal, but there is a “go-shop” provision of the deal that means the board will entertain other offers until mid-April.

“I think it’s very likely there’s going to be interest,” Wilder said.

Other items to note:
Houston’s own Vinson & Elkins served as advisors for the buyers, which includes M&A veterans Bruce Bilger and Keith Fullenweider. V&E usually manages to get a piece of most major M&A deals in energy thanks to these guys.
The new company will have an advisory board that will help keep it on the green path, including former Secretary of State James A. Baker III as advisory chairman to the new owners (is there an advisory panel this guy isn’t on?). Former EPA Administrator William Reilly and former Commerce Secretary Donald L. Evans will join the TXU board as well.
And one more thing: TXU has cancelled its media call regarding earnings today. Given all the excitement over the weekend and on Monday it seems there’s not a whole lot more to be said.

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