CenterPoint Energy Announces Sale of Texas Genco for $3.65 Billion; Sale Also Includes Buy-Out of Public Shareholders

CenterPoint Energy Announces Sale of Texas Genco for $3.65
Billion; Sale Also Includes Buy-Out of Public Shareholders 


HOUSTON, July 21  /PRNewswire-FirstCall/ -- CenterPoint Energy, Inc. (NYSE:CNP)
and Texas Genco Holdings, Inc. (NYSE:TGN) today announced a definitive
agreement for GC Power Acquisition LLC, a newly formed entity owned in equal
parts by affiliates of The Blackstone Group, Hellman & Friedman LLC, Kohlberg
Kravis Roberts & Co. L.P. and Texas Pacific Group, to acquire Texas Genco, a
wholesale electric power generation company, for approximately $3.65 billion in
cash.  The agreement includes a buy-out of Texas Genco's public shareholders. 

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The transaction, subject to customary regulatory approvals, will be
accomplished in two steps.  The first step, expected to be completed in the
fourth quarter of 2004, involves Texas Genco's purchase of the 19 percent of
its shares owned by the public for $47 per share, followed by GC Power
Acquisition's purchase of a Texas Genco unit that will be formed to own its
coal, lignite and gas-fired generation plants.  In the second step of the
transaction, expected to take place in the first quarter of 2005 following
receipt of approval by the Nuclear Regulatory Commission, GC Power Acquisition
will complete the acquisition of Texas Genco, the principal remaining asset of
which will then be Texas Genco's interest in the South Texas Project nuclear
facility.  Total cash proceeds to CenterPoint Energy from both steps of the
transaction will be approximately $2.9 billion, or $45.25 per share for its 81
percent interest in Texas Genco.

The transaction has been approved by the board of directors of CenterPoint
Energy and by the board of directors of Texas Genco acting upon the unanimous
recommendation of a special committee composed of independent members of the
Texas Genco Board.

"We believe that the sale of Texas Genco is beneficial for both companies,"
said David M. McClanahan, president and chief executive officer of CenterPoint
Energy.  "The sale enables CenterPoint Energy to reduce its debt and
concentrate on its energy delivery businesses.

"I am also pleased that Texas Genco's new owner is backed by some of today's
strongest private equity investment firms, which should allow it to build on
the firm foundation that the management and employees of Texas Genco have
established over the years.  Of course it's hard for us at CenterPoint Energy
to let go of a business that has been a part of our company for so many years. 
But under the plan we developed in response to the 1999 Texas electric
restructuring law, it is time for CenterPoint Energy to take this step," said
McClanahan.

The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co.
L.P. and Texas Pacific Group said in a statement:  "We have focused extensively
on the energy sector and we are excited to purchase Texas Genco, one of the
nation's largest independent electric generating companies. Through Texas
Genco, we are acquiring high quality coal, nuclear and gas power plants in the
rapidly growing Houston market.  We look forward to joining with the dedicated
employees of a newly-independent Texas Genco to continue to provide outstanding
service to Texas Genco's customers while developing the nation's premier
independent power generation business."

CenterPoint Energy was advised on the transaction by Citigroup Global Markets
Inc. and Baker Botts L.L.P., and the special committee of independent directors
of Texas Genco was advised by RBC Capital Markets Corporation and Haynes and
Boone, LLP.  GC Power Acquisition LLC was advised by Goldman Sachs, Deutsche
Bank and Morgan Stanley and the law firms Simpson Thacher & Bartlett LLP,
Stroock & Stroock & Lavan LLP and Vinson & Elkins LLP.

CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy
delivery company that includes electric transmission & distribution, natural
gas distribution and sales, interstate pipeline and gathering operations, and
currently owns 81 percent of Texas Genco Holdings, Inc.  The company serves
nearly five million metered customers primarily in Arkansas, Louisiana,
Minnesota, Mississippi, Oklahoma, and Texas.  Assets total over $21 billion. 
With more than 11,000 employees, CenterPoint Energy and its predecessor
companies have been in business for more than 130 years.  For more information,
visit the Web site at http://www.centerpointenergy.com/ .

Texas Genco Holdings, Inc., based in Houston, Texas, is one of the largest
wholesale electric power generating companies in the United States with over
14,000 megawatts of generation capacity.  It sells electric generation
capacity, energy and ancillary services in one of the nation's largest power
markets, the Electric Reliability Council of Texas (ERCOT).  Texas Genco has
one of the most diversified generation portfolios in Texas, using natural gas,
oil, coal, lignite, and uranium fuels.  The company owns and operates 60
generating units at 11 electric power-generating facilities and owns a 30.8
percent interest in a nuclear generating plant.  For more information, visit
our web site at http://www.txgenco.com/ .

The Blackstone Group, a private investment and advisory firm with offices in
New York, Atlanta, Boston, London and Hamburg, was founded in 1985.  The firm
has raised a total of approximately $32 billion for alternative asset investing
since its formation.  Over $14 billion of that has been for private equity
investing, including Blackstone Capital Partners IV, the largest institutional
private equity fund at $6.45 billion.  Blackstone has made private equity
investments throughout the energy sector including petroleum refining, oil and
gas exploration and coal mining.  In addition to Private Equity Investing, The
Blackstone Group's core businesses are Private Real Estate Investing, Corporate
Debt Investing, Marketable Alternative Asset Management, Corporate Advisory,
and Restructuring and Reorganization Advisory. For more information, visit
http://www.blackstone.com/ .

Hellman & Friedman LLC is a San Francisco-based private equity investment firm
with additional offices in New York City and London.  Since its founding in
1984, the Firm has raised and managed approximately $5 billion of committed
capital and invested in over 45 companies.  Hellman & Friedman recently
completed raising its fifth fund, Hellman & Friedman Capital Partners V, L.P.,
a $3.5 billion fund.  Representative investments include Axel Springer AG (ASV
GR), ProSieben Sat.1 AG (PSM GR), Formula One Holdings, Ltd, Arch Capital Group
Limited (ACGL), the NASDAQ Stock Market, Inc. (NDAQ), Young & Rubicam, Inc.,
Western Wireless Corporation (WWCA), Franklin Resources, Inc. (BEN), and
others.  For more information, visit http://www.hf.com/ .

Kohlberg Kravis Roberts & Co. L.P. is one of the world's oldest and most
experienced private equity firms specializing in management buyouts, with
offices in New York, Menlo Park, California, and London, England.  For more
information, please visit http://www.kkr.com/ .

Texas Pacific Group, founded in 1993 and based in Fort Worth, TX, San
Francisco, CA, and London, is a private investment partnership managing over
$13 billion in assets.  Over the past several years, TPG has built an industry
practice focused on the energy and power sectors (Denbury Resources, Portland
General Electric (pending)).  Additionally, the firm seeks to invest in world-
class franchises across a range of other industries, including airlines
(Continental, America West), branded consumer franchises (Burger King, Del
Monte, Ducati), leading retailers (Petco, J.Crew, Debenhams - UK), healthcare
companies (Oxford Health Plans, Quintiles Transnational), and technology
companies (ON Semiconductor, MEMC, Seagate).

This news release includes forward-looking statements.  Actual events and
results may differ materially from those projected.  The statements in this
news release regarding future financial performance and results of operations
and other statements that are not historical facts are forward-looking
statements.  Factors that could affect actual results include the timing and
impact of future regulatory and legislative decisions, effects of competition,
weather variations, changes in CenterPoint Energy's or its subsidiaries'
business plans, financial market conditions, the timing and extent of changes
in commodity prices, particularly natural gas, the impact of unplanned facility
outages and other factors discussed in CenterPoint Energy's and its
subsidiaries' filings with the Securities and Exchange Commission. 

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http://photoarchive.ap.org/

DATASOURCE: CenterPoint Energy, Inc.; Texas Genco Holdings, Inc.



CONTACT:  media, Leticia Lowe, [phone], or investors, Marianne

Paulsen, [phone], both of CenterPoint Energy, Inc.; or John A. Ford of

The Blackstone Group, [phone]; or Melissa Ma, [phone], or

Steven Bruce of Abernathy MacGregor, [phone], both for Hellman &

Friedman LLC; or David Lilly or Roanne Kulakoff, [phone], both for

Kohlberg Kravis Roberts & Co. L.P.; or Owen Blicksilver, [phone], for

Texas Pacific Group



Web site:  http://www.centerpointenergy.com/

http://www.txgenco.com/

http://www.blackstone.com/

http://www.hf.com/

http://www.kkr.com/ 

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