Reports: Citigroup, UBS preparing to submit competing offers to buy Enron trading operations
Monday, December 10th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ Citigroup Inc. and UBS AG are preparing rival bids to purchase the sputtering trading operations of Enron Corp., the bankrupt Houston-based energy company, according to published reports.
The two investment banks are expected to make separate proposals as early as this week to a New York bankruptcy court, the Wall Street Journal and the Financial Times reported Monday, citing unidentified sources.
Enron's trading business, which accounted for roughly 90 percent of earnings in the third quarter, has deteriorated in recent weeks because of uncertainty about Enron's finances.
JP Morgan Chase, which like Citigroup is a large Enron creditor, is expected to submit its own offer at a later stage, the newspapers said. The potential size of the bids was not reported.
Negotiators for Enron, Citigroup and UBS met over the weekend to finalize the details of the proposals, although sources warned that either proposal may still be withdrawn, the newspapers said.
According to the reports, Enron would retain a large minority stake under the terms of the proposals being prepared.
Representatives from Citigroup and UBS said their companies would not comment on the matter. Enron did not immediately return calls seeking comment.
Just months ago Enron was the country's seventh-largest company in terms of revenue. But investors and traders evaporated after the company revealed in October that questionable partnerships helped keep billions of dollars in debt off its books. The company also acknowledged it overstated profits for four years.
Enron's swift collapse has launched investigations by the Securities and Exchange Commission, Labor Department, Justice Department and a congressional committee.