Credit Suisse is offering a debt package worth $40.2 billion to fund a competing offer for TXU, the Texas-based energy company which has agreed to be bought by Kohlberg Kravis Roberts and Texas Pacific Group, according to the Financial Times.
The Swiss bank's willingness to arrange the financing will eliminate a key obstacle to several private equity groups that are considering a rival offer, the newspaper said.
Credit Suisse declined to comment.
Because Credit Suisse is an adviser to TXU in its deal announced on Monday, any debt package arranged by the Swiss bank for another offer would be known as "staple financing," which is not an unusual arrangement in deal situations. TXU may solicit proposals from other parties through April 16.
Citing people familiar with the matter, the FT said that if a rival bidder emerges for TXU, Credit Suisse would probably lend about $13 billion to $15 billion and syndicate the rest to other banks.
The FT also said that other banks also are in talks with potential rival bidders for TXU about offering their own debt packages to fund a counter offer.
TXU said on Monday it agreed to be acquired by a group led by private equity firms Kohlberg Kravis Roberts and Texas Pacific Group for $31.8 billion in the largest leveraged buyout in history.
Including debt, the deal is valued at $43.8 billion, according to research firm Dealogic.