"A Record Buyout Turns Sour for Investors"

The Texas utility formerly known as TXU seems to be turning out a big bust for investors. It's a story that goes back to the political and economic failure of the Bush-era plan to build hundreds of coal-fired electric plants -- and the fact that the go-go pace of natural gas drilling has pushed the price of that commodity down for the long term.

"Struck at the peak of the buyout boom five years ago, the $45 billion acquisition of the Texas energy giant TXU — the biggest leveraged buyout in history — has been a painful investment for its private equity owners.

They did not need Warren E. Buffett to remind them how bad things were.

America’s most famous investor, in his annual shareholder letter on Saturday, highlighted his $2 billion wrong-way bet on the bonds of the company, which its new owners have renamed Energy Future Holdings. He called the investment 'a big mistake' and said it was at risk of losing all of its value."

Peter Lattman reports for the New York Times February 28, 2012.


"TXU Takes $32B Deal, Cuts Coal Plans" (USA Today: 2/28/2007)

Source: NY Times, 02/29/2012