UPDATE 4-TXU agrees to be acquired for $31.8 billion

(Adds details on management and valuation, updates stock price)

By Jessica Hall

PHILADELPHIA, Feb 26 (Reuters) - Texas power company TXU Corp. TXU.N said on Monday it agreed to be acquired by a group led by private equity firms Kohlberg Kravis Roberts & Co. [KKR.UL] and Texas Pacific Group [TPG.UL] for $31.8 billion in the largest leveraged buyout in history.

The investor group will pay $69.25 per share for TXU, a 15.4 percent premium over TXU's closing stock price of $60.02 on Friday. The deal tops the previous leveraged buyout record, the $25.1 billion takeover of RJR Nabisco, also by KKR, announced in 1988.

"It seems like a normal offer. What's mind-boggling is that it's being done by private equity," said Daniele Seitz, an analyst at Dalhman Rose, who has a "hold" rating on the stock.

Shares of TXU were at $68.20 in midday trading on the New York Stock Exchange, after rising to $68.33.

Including debt, the TXU deal is valued at $43.8 billion, according to research firm Dealogic.

The buyout firms are paying 8.5 times EBITDA (earnings before interest, taxes, depreciation and amortization) for TXU, which tops the industry average of 7.9 times EBITDA, TXU said.

In addition to KKR and Texas Pacific Group, equity investors in the company will be GS Capital Partners, Lehman Brothers Holdings Inc. (LEH.N: Quote, Profile, Research, Stock Buzz), Citigroup (C.N: Quote, Profile, Research, Stock Buzz), and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), TXU said.