TheDeal.com executive editor Yvette Kantrow writes that despite the bad public relations image that private equity has, it helped itself by making a big deal in an industry with an even-worse image.
She wrote, “But who knew all it would take for the so-called asset-strippers to polish up their image would be for them to make a giant deal in an industry even more disliked and tone-deaf to public relations than their own? Witness the surprisingly positive (or at least not negative) media reaction to Kohlberg Kravis Roberts & Co.’s and Texas Pacific Group’s $45 billion buyout of TXU Corp. While the Texas legislature has looked askance at the giant buyout of the Texas-based utility and its possible impact on electricity rates, the state’s media has been upbeat, even jolly.
“‘Electrifying: New greener, friendlier TXU may be coming your way,’ cooed a headline in the Waco Tribune-ÂHerald that took celebration into the land of marketing. ‘The investors have a history of serving the public, experience they hope to tap as they prepare to take over TXU,’ the story informed.
“Henry Kravis as public servant? Nothing against Henry, but that’s not a notion expressed by the media very often. Still, when compared to a utility that only a few days earlier was threatening rolling blackouts if its scheme for a bunch of coal-fired power plants wasn’t approved, a buyout guy, especially one that talks to environmentalists, looks pretty good.
“The coverage hardly dug too deeply. An editorial in The Lufkin Daily News, provided by Cox News Service, was as sanguine as Waco: ‘Partnership’s agreement to buy TXU sounds like a win-win for all involved,’ blared its headline. The editorial board of The Dallas Morning News was also impressed: ‘Air of Victory: A pragmatic — and healthy — business plan’ was its take on the deal. Meanwhile, the Houston Chronicle picked up a piece from syndicated columnist Froma Harrop, who declared the TXU deal a winner because it paired Wall Street with the environmentalists.
“There were a few naysayers. Harrop’s piece stuck in the craw of the Chronicle’s own business columnist, Loren Steffy, who noted on his blog ‘that the only green Wall Street understands is cash, and this deal is no different. If Harrop thinks the TXU buyout will ‘affect the 150 other coal-fired plants now on drawing boards across the country,’ as she contends, she’s mistaken.’ Steffy also criticized the deal in print. In his first column on the deal, he wrote, tapping into a metaphor worn smooth by a thousand hands: ‘The barbarians came to the gates bearing green in the form of dollars and environmental promises. But the promises are hollow, and the dollars aren’t theirs.'”
Read more here.
