TXU Corp. (NYSE:TXU) , a Dallas-based energy company, has announced an update regarding the “go-shop” process being conducted by Lazard Freres & Co LLC (Lazard), the independent financial advisor to the TXU Corp. Board of Directors and its Strategic Transactions Committee. Under the terms of the definitive merger agreement announced February 26, 2007, an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group will acquire TXU in a transaction valued at $45 billion.
Under the terms of the merger agreement, shareholders will be paid $69.25 per share at closing. The transaction is subject to receipt of shareholder approval and required regulatory approvals, as well as satisfaction of other customary closing conditions. There is no financing condition to the transaction.
Under the merger agreement, TXU has the right to solicit other proposals through April 16, 2007. The TXU Board, acting through the Strategic Transactions Committee of the Board, with the assistance of Lazard, has solicited interest from over 70 potential purchasers, including US utility companies, non-US utility companies, other energy companies and financial sponsors and infrastructure investors. TXU has entered into confidentiality agreements with nine of these entities and provided them confidential information regarding TXU and its subsidiaries.
Despite these efforts, through April 1, 2007, none of the parties contacted has submitted a formal proposal, and there is no indication that any of the parties is preparing a proposal that will be superior from either a price or transaction certainty perspective.
While TXU remains open to receiving competing proposals and will continue to work with its financial advisor through the go shop period to determine if there are possible competing proposals that could be superior to the existing proposal, Lazard has advised the Strategic Transactions Committee that it does not believe any superior proposal will be submitted as a result of its go shop efforts.
TXU Corp., a Dallas-based energy company, manages a portfolio of competitive and regulated energy businesses primarily in Texas. In the competitive TXU Energy Holdings segment (electricity generation, wholesale marketing and retailing), TXU Energy provides electricity and related services to more than 2.1 million competitive electricity customers in Texas. TXU Power has over 18,100 MW of generation in Texas, including 2,300 MW of nuclear and 5,800 MW of coal-fired generation capacity. TXU Wholesale optimizes the purchases and sales of energy for TXU Energy and TXU Power and provides related services to other market participants. TXU Wholesale is the largest purchaser of wind-generated electricity in Texas and fifth largest in the United States. TXU Corp.’s regulated segment, TXU Electric Delivery, is an electric distribution and transmission business that uses superior asset management skills to provide reliable electricity delivery to consumers. TXU Electric Delivery operates the largest distribution and transmission system in Texas, providing power to three million electric delivery points over more than 100,000 miles of distribution and 14,300 miles of transmission lines. Visit www.txucorp.com for more information about TXU Corp.