{"id":1118,"date":"2007-02-27T17:15:53","date_gmt":"2007-02-27T09:15:53","guid":{"rendered":"http:\/\/maddruid.com\/?p=1118"},"modified":"2009-09-26T21:16:27","modified_gmt":"2009-09-26T11:16:27","slug":"1114-of-kkr-at-the-gate","status":"publish","type":"post","link":"https:\/\/maddruid.com\/?p=1118","title":{"rendered":"[1114] Of KKR at the gate"},"content":{"rendered":"<p><a href=\"https:\/\/maddruid.com\/?p=1116\">After the euphoria<\/a>, the important question comes up: how the hell KKR manages to convince other people to pay for their fun ride?<\/p>\n<p>At the NYT today:<\/p>\n<blockquote><p>In an unusual twist that may soon become common, the banks are going one step further than simply providing the debt financing involved in the deal, in this case a daunting $24 billion of debt.<\/p>\n<p>The banks are also lending $1 billion to TXU&#8217;s buyers, Kohlberg Kravis Roberts &amp; Company and the Texas Pacific Group \u2014 not as secured debt, but in the form of equity using the bank&#8217;s own cash.<\/p>\n<p>[&#8230;]<\/p>\n<p>The risk to the banks is that the value of TXU could fall sharply below the $69.25 being offered. Yesterday, TXU shareholders welcomed the deal, driving up the shares 13 percent, to $67.93. [<a href=\"http:\/\/www.nytimes.com\/2007\/02\/27\/business\/27deal.html\" target=\"_blank\"><em>Private Equity Buyout of TXU Is Enormous in Size and in Its Complexity<\/em><\/a>, Feb 27 2007]<\/p><\/blockquote>\n<p>Also, humor:<\/p>\n<blockquote><p>The deal still must undergo months of scrutiny from state and federal regulators. And while the deal has won support through pledges to cut electric rates and scale back a plan to build coal-fired power plants, the private equity firms must still overcome a perception that buyout buyers are temporary owners who are not beholden to shareholders or customers.<\/p>\n<p>Talk about building bridges.  [<a href=\"http:\/\/www.nytimes.com\/2007\/02\/27\/business\/27deal.html\" target=\"_blank\"><em>Private Equity Buyout of TXU Is Enormous in Size and in Its Complexity<\/em><\/a>, Feb 27 2007]<\/p><\/blockquote>\n<p>If KKR sounds familiar to you and you are unfamiliar with modern economics or finance history, you might be thinking of <a href=\"http:\/\/en.wikipedia.org\/wiki\/Barbarians_at_the_Gate_(film)\" target=\"_blank\"><em>Barbarians At The Gate<\/em><\/a>, based on the book that goes by <a href=\"http:\/\/en.wikipedia.org\/wiki\/Barbarians_at_the_Gate\" target=\"_blank\">the same title<\/a>. Heh. I bet somebody is going to write a book on this, just like what happened the last time KKR had fun at RJR.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>After the euphoria, the important question comes up: how the hell KKR manages to convince other people to pay for their fun ride? At the NYT today: In an unusual twist that may soon become common, the banks are going one step further than simply providing the debt financing involved in the deal, in this [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[947,949,951,948],"class_list":["post-1118","post","type-post","status-publish","format-standard","hentry","category-economics","tag-barbarians-at-the-gate","tag-buyout","tag-kkr","tag-private-equity"],"_links":{"self":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1118"}],"version-history":[{"count":3,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1118\/revisions"}],"predecessor-version":[{"id":5270,"href":"https:\/\/maddruid.com\/index.php?rest_route=\/wp\/v2\/posts\/1118\/revisions\/5270"}],"wp:attachment":[{"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maddruid.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}