Source Pravda.Ru

Wall Street moves higher TXU takeover increases investor optimism about M&A

Wall Street bounced higher Monday after a proposed takeover of Texas power company TXU Corp. gave investors another dose of optimism about the pace of acquisitions this year.

The company said before the opening bell it agreed to be bought by a consortium of private equity firms led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group. The deal, worth $45 billion (EUR34.2 billion) with the assumption of debt, marks the biggest leveraged buyout in U.S. corporate history.

Also lending support to stocks was Station Casinos Inc., which agreed to be taken private by a private equity firm started by the company's founding family. Temple-Inland Inc., a conglomerate that offers everything from packaging material to financial services, announced it plans to separate itself into three standalone public companies.

The takeover activity injected confidence into the market, and snapped a three-day slide in the Dow Jones industrials. Last year, the amount of mergers and acquisitions surpassed the $4 trillion level for the first time and helped power the Dow into record territory, reports AP.

In the first hour of trading, the Dow rose 34.05, or 0.27 percent, to 12,681.53.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 5.39, or 0.37 percent, at 1,456.58, and the Nasdaq composite index added 8.44, or 0.34 percent, to 2,523.54.

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