Dallas-based TXU, Texas' largest electricity producer with more than 2.3 million customers, has agreed to be sold to private-equity firms in the largest private buyout in U.S. corporate history. An investor group led by Kohlberg Kravis Roberts and Texas Pacific Group is paying about $32 billion and would assume about $13 billion in debt. The buyer group includes Goldman Sachs and three other Wall Street firms. The buyout firms sought support by agreeing to scale back a plan to build 11 new coal-fired power plants that would produce tons of new greenhouse gas emissions. Critics have raised environmental concerns. The Sustainable Energy and Economic Development Coalition says its happy that eight coal plant projects will now be taken off the table by TXU. Dave Hawkins with the National Resources Defense Council's climate center says this sale is significant.
"This development takes a company that was opposing global warming controls and turns it into one that will be supporting global warming controls. It takes a company that was proposing to build thousands of megawatts of coal plants in Texas and in other states and cuts 75 percent of those proposed projects with a pledge to not try to build them, either in Texas or in other states."
TXU says Secretary of State James Baker of Houston will serve as advisory chairman to the new owners. Former Commerce Secretary Donald Evans of Midland would join the TXU board. TXU directors voted Sunday night to recommend that shareholders approve the sale. TXU says the company would get a $1 billion reverse break-up fee if the buyers can't close the sale. The utility also has until mid-April to shop for better offers, although the buyout firms would get a chance to trump any new bids.
Temple-Inland announced plans to separate into three stand-alone public companies and to sell its timberlands. Austin-based Temple-Inland is a packaging, forest products, real estate and financial services company. As part of the breakup, Temple-Inland will retain its corrugated packaging and building products operations. The company will spin off its financial services business, which owns Guaranty Bank in Texas and California, and its real estate unit, which operates as Forestar Real Estate Group. Billionaire investor Carl Icahn in January acquired a nearly seven percent stake in Temple-Inland and has advocated breaking up the company. Temple-Inland also plans to sell off some 1.8 million acres of timberland in Texas, Louisiana, Alabama and Georgia. Financial terms of the spinoffs and property sales haven't been released.
A judge in Rhode Island refused to grant a new trial in the state's lawsuit against some former lead paint makers. The judge will appoint a special master to advise the court on what the companies should do to clean up lead paint in that state. A Rhode Island jury last year found three former lead paint manufacturers--Sherwin-Williams, Dallas-based N.L. Industries and Millennium Holdings--liable for creating a public nuisance. The judge rejected a request from the companies for a new trial. The companies say they'll appeal. Lead paint was banned for residential use by the federal government in 1978.
The abandoned downtown Austin building that symbolized the dot-com collapse of 2001 was demolished Sunday to make way for a new courthouse. A crowd of hundreds looked on as the unfinished building came down in about ten seconds with a series of dynamite explosions. Intel Corporation stopped construction of the building in 2001 when the tech boom fizzled. Some onlookers questioned whether the implosion was a success because edges of the concrete and metal skeleton remained standing afterward. But Shala Geer-Smith, a spokeswoman for building owner General Services Administration, tells the Austin American-Statesman that the building fell according to plan. A new federal courthouse will be built at Fourth and San Antonio Streets by 2012.