Txu Lbo

Investors led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group will buy TXU Corp., the largest power producer in Texas, for $45 billion in the biggest- ever leveraged buyout.The investors are providing $8.5 billion in cash and the rest of the deal will be debt, according to people familiar with the matter. The buyout firms will put up $5 billion and Goldman Sachs is investing $1.5 billion, Lehman Brothers Holdings Inc., Citigroup Inc. and Morgan Stanley are also investing. KKR, run by Henry Kravis and George Roberts, and David Bonderman’s Texas Pacific, joined by Goldman Sachs Group Inc., will pay $69.25 for each TXU share, 15 percent more than the closing stock price on Feb. 23. TXU has only $11 billion of debt with the new $36 Billion debt, $22.5 billion of which matures by 2014 the rest $13.5 to mature in 2034. TXU energy post LBO has been renamed as Energy Future Holdings Inc., with the acquisition using a combination of high-yield, high-risk loans and bonds. As part of the buyout, the electric distribution part of the company will be called Oncor Electric Delivery, the electric generation business called Luminant, leaving TXU Energy as solely a retail provider of electricity without any electrical distribution or production assets.
Off the various investors, the largest one KKR invests primarily through leveraged buyouts as well as growth capital investments. It specializes in private equity investments with a focus on specific industry sectors where the firm has created nine dedicated investment groups. TPG is investing $ 1.5 billion followed by Goldman Sachs and others. The likes of Franklin Advisers of San Mateo, California, Berkshire Hathaway Life Insurance Co., a unit of Warren Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., and Capital Research & Management Co. are among the largest bondholders
TXU was highlighted in Peridot Capital's 2006 Select List as an undervalued gem in the midst of a very shareholder-friendly