Deals and IPOs

Shareholder Advisor Backs $32 Billion TXU Buyout


Shareholder advisory service Proxy Governance recommended Wednesday that TXU shareholders vote in favor of a $32 billion, or $69.25 per share, buyout by a group of investors.

TXU has set a Sept. 7 shareholder vote, where it needs two-thirds approval to go ahead with its proposed sale to a group led by private equity firms Kohlberg Kravis Roberts and TPG Capital, formerly known as Texas Pacific Group.

In a report, Proxy cited analysts' consensus that the offer price presents a fair value for shareholders. It also noted that the investor group has secured financing for the deal and "shows no signs of walking away at this time."

But the advisory firm recommended shareholders withhold votes for three of the board nominees, citing the high compensation for John Wilder, the Texas power company's chief executive.

"The potential payouts of nearly $230 million that will be made to Wilder in connection with the change in control and termination of his employment are excessive," Proxy said in its report.

Fellow proxy adviser Egan-JonesTuesday also issued a report recommending shareholders vote for one of the largest buyouts in history.