TXU deal is big and complex, reports media

by Blair Lovern

Sometimes The New York Times is a glorified and pompous joke. But sometimes it can produce easy-to-read, terrific breakdowns of things that are ridiculously multifarious without ever using those two words. About TXU, the NYT says that lenders have created a type of loan for these new mega-deals:

Known as an “equity bridge,” the arrangement allows leveraged buyout firms to buy companies with even less cash upfront. The idea is that the leveraged buyout firms will find other investors to ante up cash after the deal is announced.

These bridges can lead to trouble, however. If the private equity firms cannot find new investors — and it is their job, not the banks’, to find them — or if the value of the asset falls sharply, the banks are left holding the bag.

Try to find other detailed, stand-out coverage among the 1,200+ stories reporting, other than this deal is huge. You'll probably run into a brick wall. No doubt this doozie will be picked apart down the road, but there's not a lot out there now.

Meanwhile, TXU reportedly plans to announce a 2006 profit of about $2.5 billion. It could be *sniff* the last annual earnings statement *sniff* as a public company. You can't tell, but I am holding back the tears.

The AP says the deal has drawn some "muted criticism" from general skeptics and environmentalists, who (reports the DMN) may play a not-so-modest role in future takeover deals with other polluters who happen to power most everything in the world that requires it.

TXU scraping eight coal plants for this deal is "a significant breakthrough on climate change," says one green guy. Although he makes no mention of the coal plants China and India are planning to build in the coming years, which is roughly 100 times the number of plants TXU said it would axe the other day. Or is it 275 times as many? Or is it just too hard to contemplate that China alone appears to be heading toward emissions levels that will surpass those of every industrialized country combined in the next 25 years?

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Anonymous

Billusa99, says:

And let's not forget two very important things:

1) the "new TXU" has made no promises it will not build another 8 plants in future.
2) the 3 they still waant to build, which are still subject to lawsuits, use crushed brown lignite coal and are the THREE DIRTIEST plants of the 11 previously proposed!