Private equity stars make rare appearance to plug TXU deal

AUSTIN — Leveraged-buyout superstars Henry Kravis and David Bonderman made a personal appeal Tuesday to salvage their proposed $32 billion purchase of electric utility TXU Corp., and they clashed with lawmakers over the role of state regulators in approving the deal.

Lawmakers are considering legislation that could slow or derail the deal by making TXU smaller and forcing it to seek approval for the sale from the Public Utility Commission.

Kravis, the founding partner of Kohlberg Kravis Roberts & Co., said if lawmakers impose new regulatory hurdles, KKR and Texas Pacific Group might walk away from the biggest private buyout ever.

“This is a large commitment for KKR and TPG,” Kravis said. “We did it with the full understanding that the rules were transparent; that the PUC had certain authority and had we known that the rules would be changed, I think that would have changed our thinking whether we would have made an offer.”

Kravis said if the sale fails, TXU won’t make the environmental concessions and rate cuts that his group has promised.

A bill to let the PUC review the sale of an electric utility has passed the Senate and is pending in the House.