Environmental reputation as an intangible asset

The big news on Wall Street this morning is the private equity buyout of energy giant TXU. But the real shocker is that the new owners wanted to improve the company’s environmental image as part of the deal. According to A Buyout Deal That Has Many Shades of Green – New York Times:

Because private equity firms are unregulated and historically have valued their privacy, neither Kohlberg Kravis nor Texas Pacific were eager to become an “enemy combatant” of the environmental groups, people involved in the talks said.

I wonder if we could quantify what the end of the warfare between the company and the environmentalist might be worth in dollars and cents. The purchase price is already at a $15 premium over the current stock price. But the buyers are betting the deal will make future energy investments by the company a lot easier. This is one to keep an eye on.

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