February 25, 2007
KKR to buy TXU?
Possibly, but it has to get past Texas regulators first.
OK, I know... that made laugh a little as well. They should really write it up as "KKR will assume control after the transaction is approved by TXU shareholders and rubberstamped by Texas regulators".
I don't know how I feel about all this. I've known people who have worked with KKR and I know they usually like to trim employment with layoffs after acquiring a company. I know they like sharp, focused management teams. I also know that if there is any hope for TXU to compete in a truly competitive environment, this is probably the only way because they sure as hell haven't been able to do it so far.
I'm not so much for workforce reductions, unless it's to trim bloated upper management who are in my opinion the ultimate liability to shareholder value.
Posted by mcblogger at February 25, 2007 12:46 PM
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Comments
I know this hasn't gotten much attention, although the coal-fired plants have, but the whole *We're going to build a bunch of nuclear power plants in Texas* also happened in the same time frame. Makes me wonder if that wasn't also part of jacking up the sale price by adding some additional projects that WE are paying for with tax breaks, loans, and increased risk.
Posted by: cof ![[TypeKey Profile Page]](http://www.mcblogger.com/nav-commenters.gif)
at February 25, 2007 01:09 PM
I don't know...13x's earnings is pretty cheap considering that the regulatory environment in Texas is soooo good for companies and that's without even looking at new potential plants.
I'm OK with giving companies low interest loans as long as they create a superpriority claim against the company. And they company gives up the ability to lobby the any government, do any any issue advocacy and does not help any candidate.
Posted by: mcblogger at February 25, 2007 01:44 PM
That last part is the key. We shouldn't ever have to wonder if someone's vote is tied to taking money from a corporation.
Posted by: cof at February 25, 2007 02:26 PM
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