Crashing the TXU Party: Blackstone, Carlyle and Hellman & Friedman

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Private equity firms Blackstone, Carlyle and Hellman & Friedman are considering a bid for TXU, the Texas energy company which accepted a buyout bid from rival private equity groups Kolbert, Kravis & Roberts and the Texas Pacific Group. The Financial Timesbroke the story early this morning, and later it was confirmed by a Reuters source.
From the FT:

A consortium of leading private equity groups has moved much closer to mounting a rival offer to trump the $45bn (£23bn) takeover of TXU, the Texas-based energy group, by Kohlberg Kravis Roberts and Texas Pacific Group.
If this consortium tables a formal offer for TXU, it could create a bidding war for the largest private equity deal on record.
It would also mark a milestone for competition among the world's largest buy-out firms, which have so far rarely sought to break up each other's deals.
According to people familiar with the matter, Blackstone, Carlyle and Hellman & Friedman may approach the TXU board with a proposal in coming weeks.

There's a lot of skepticism about whether or not the Blackstone consortium would seriously challenge the bid from KKR and TPG. The size of the deal could make raising funds for the bid difficult—although the willingness of several large banks to go so far as to extend equity bridges to the buyer indicates that banks are hungry to get a piece of the TXU deal.
What really gives some observers pause is whether or not the Blackstone consortium would decide that it has a better plan than KKR-TPG for uncovering value in the company. One of the reasons private equity groups give for the lack of competition in buyout bids is that they seldom believe they can run the company better than their rivals.
But what makes this buyout different than many others is that it is essentially a non-financial, non-operational opportunity for private equity. Many of the problems of TXU are political--problems between the current management and environmentalists and lawmakers have hurt the performance of TXU's stock and its ability to expand in Texas. The feeling is that the current management and ownership cannot possibly realize the full value of the company, and that there is some value to just being someone else. The throws an "x" factor into the mix by opening the possibility that the Blackstone consortium may believe it has even better relations with Texas environmentalists and lawmakers than KKR-TPG.
Rival looms in $45bn TXU bid{$$} [Financial Times]
Buyout firms mull rival TXU bid [Reuters]

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