The prospective acquirers of TXU Corp. have pledged to cancel proposals to build eight of 11 controversial coal-fired power plants in Texas, in case if they gain control of the company. The move is especially designed to neutralize one of the biggest possible obstacles to the deal. The offer is contained in a 10-point program the would-be buyers, Kohlberg, Kravis, Roberts & Co., and Texas Pacific Group, have stated that they will carry forward if they buy the big Texas utility in a deal valued around $32 billion and more than $12 billion in TXU debt, in addition.
In the meanwhile, TXU Corp., the biggest power producer in Texas, has reportedly agreed to curtail plans for coal-fired generators to win support from environmentalists for a proposed $44 billion buyout. Dallas-based energy giant has stated that it will cancel eight of the 11 coal units it has planned and to support mandatory U.S. limits on power-plant pollution, which contributes to global warming. The company has also decided to direct $400 million to cutting power demand in Texas, pleasing environmental groups that favor conservation.
If the deal is reached, TXU would become a private company and it would not be required to reveal its financial statements publicly or comply with federal regulations such as the Sarbanes-Oxley Act. However, the company in its all probability would still have to disclose some information to state and federal power regulators.
According to the reports, the terms have not been finalized as of now, but the private equity firms are expected to offer around $70 per share for TXU. That would mark an almost 17 percent premium for Texas’ biggest power company, whose shares closed at around $60 on the last trading day last week.
