Three public interest and environmental groups in Texas are asking TXU shareholders to vote against the proposed buyout by investments groups TPG and Kohlberg Kravis Roberts & Co.
The groups -- ACORN, the SEED Coalition, and Public Citizen -- on Tuesday issued a list of additions, they say the deal should include.
The groups want the companies to extend a promised 18-month discount for low-income families to five years, give the $270 million bonus TXU CEO C. John Wilder would receive if the deal closes to low-income families and withdraw permit applications for eight coal-fired plants proposed for Texas.
"If the buyout is completed, Wilder could walk away with $270 million. Most of that would come from cashing in his estimated 4 million company shares," alleged Derrick Richardson, of ACORN, in a statement issued by the groups.
ACORN, which stands for the Association of Community Organizations for Reform Now, is a national group that advocates for low- to moderate-income families. Its research office is in Dallas.
"This absurd golden parachute is almost as much as consumers have been overcharged since Wilder became CEO," Richardson went on to say in the group statement. "Wilder and other TXU stockholders stand to profit substantially from the buyout, while consumers will likely be left paying even higher electricity bills to take care of the $24 billion in new debt that the 'New TXU' will acquire through the buyout. Any way you look at it, the buyout will be a bad deal for Texans, and we are urging shareholders to vote against it."
TXU spokeswoman Lisa Singleton said Wilder, who holds just under 4 million shares of TXU stock, would be entitled to the values of those share regardless of whether the buyout deal closes.
"Those shares are not, as Public Citizen suggested, a `bonus' that he receives if the transaction is completed," she said.
Singleton also said that TXU's commitment to its low-income customers is unprecedented. When state funding for a program to help low-income families pay their utility bills ended, TXU continued to provide low-income customers a 10 percent rate reduction, she said.
In addition, TXU Energy, a unit of Dallas-based TXU , has committed $25 million to assist families in need that are unable to pay their electric bills. Singleton added.
Fort Worth-based TXU and New York-based KKR have offered to buy Dallas-based TXU Corp. for about $32 billion. Including the assumption of TXU debt, the deal is worth about $45 billion.
The groups say that while TXU's buyers have said they will build only three of 11 coal-fired plants TXU previously planned to build, there are loopholes in their promises that allow them to change their minds. The groups want TXU to withdraw the applications for those eight plants prior to the completion of the buyout.
Singleton said TXU filed for permits for the plants in April 2006, but permitting action was suspended after the announcement of the proposed merger. She said attorneys filed paperwork last week requesting that those permits stay suspended.
TXU shareholders are set to vote on the buyout Friday.
Found this post useful? Consider subscribing to
