September 8, 2007 (LPAC)--On Friday, Sept. 7, shareholders of TXU, the huge Texas utility, agreed to proceed with the largest buyout in history. Texas Energy Future Holdings, a holding company of private equity firms Kohlberg Kravis Roberts (KKR) and Texas Pacific Group, agreed to buy the utility for $69.25 per share, in a deal that may be the last hurrah of mega-buyouts--if it doesn't fall apart in the interim. There are several hurdles left to surmount, including approval by the Nuclear Regulatory Commission and the Public Utility Commission of Texas. The largest hurdle of all will be the financial system itself, busily converting trillions in "assets" into thin air as it collapses. All told, the deal may end up costing $45 billion.
Just last week, according to the Sept. 1 London Times, the banks financing the deal to the tune of $26 billion were offering $1 billion to KKR to break it, knowing fallout from the fast-developing credit freeze-up would leave them taking huge losses as they try to peddle the debt to fearful investors. The balky lending banks are some of the largest investment banks in the world, including Goldman Sachs, Morgan Stanley, Citigroup, JP Morgan, and Lehman Brothers. KKR refused to stop the deal. They had secured their loans at the height of the buyout boom, locking in very good terms, and were determined to plow ahead despite the growing problems in the buyout industry with financing and closing deals.
LaRouche's comment on the deal: "It's all bunk. The banks don't have any money. KKR is desperate, they're finished, and they know it. The whole thing is gone. It's not a series of individual problems with this or that hedge fund - the hedge fund SYSTEM is dead, along with the entire sub-prime mortgage scam. They should just reconcile themselves to losing their money. My statement is: Taking any money out of the banks to bail out the hedge funds is a crime against humanity. They're dead, and it is a waste of time and effort. Putting money in hedge funds today is like investing in D-marks in 1923."
