Zacks Analyst Interview Highlights: TXU Corporation.

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Jon Kolb, who discusses TXU Corporation (NYSE: TXU).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

The TXU Corporation (NYSE: TXU) leveraged buyout [LBO], the largest LBO in history at $45 billion, will likely close within the next six months, as only federal approval is required and no state utility commission approval is necessary. For the next 50 days, the $69.25 per share takeout price offered by KKR and Texas Pacific may still be improved by other buyers. Given the considerable premium to shareholders, I believe it is a foregone conclusion that TXU shareholders will unanimously approve either this deal or a better offer.

TXU has been one of you strongest Buys in the utilities sector for the past couple years, hasn't it?

Yes, I've had a Buy recommendation on TXU since October of 2004 when the stock was at about $30 per share. The takeout price represents about 130% appreciation since our upgrade, which on an annualized basis is roughly 60% share price appreciation per year.

On a more macro-level view, the aggregate electric utility industry experienced shareholder returns of approximately 18%, 18% and 20% in 2004-2006. We attribute these very strong returns, which are twofold-to-threefold the historical norm for the entire stock market, to three factors: historically low interest rates, improving earnings and a return to more stable earnings as utilities exit more volatile and frequently unprofitable businesses, and a takeover premium built into utility stock prices.

Read the full interview at http://at.zacks.com/?id=2647.

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