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USA: Enron, Dynegy Confirm Possible Merger Talks

Private Equity Fund Of Funds HOUSTON -- Enron Corp., plagued by investor doubts and under the gun to shore up its crumbling finances, said on Thursday it was talking with power trading rival Dynegy Inc. about a possible merger.

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Curve Equity Exposed Fund The company, whose stock and credit ratings have plummeted amid an uproar about questionable business transactions, admitted it made bookkeeping errors and restated earnings for the last four years.

But such periods are seldom permanent, analysts note, -such as Duke Energy, American Electric Power, Dynegy and Williams Cos.--already are taking over some of the contract trading that Enron specialized in.

Equity Income Funds It also said former Chief Financial Officer Andrew Fastow, who abruptly left the company last month, had made $30 million managing partnerships linked to the deals. The deals, which were off the balance sheet, are now under investigation by the U.S. Securities and Exchange Commission for possible conflict of interest.

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Capital Casebook Equity Two other executives, managing director and treasurer Ben Glisan and Enron division general counsel Kristina Mordaunt, were both believed to have links to the Fastow-led partnerships and have been fired, the company disclosed.

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Private Investment In Public The announcements threw a spotlight on Enron's stark situation, in which the nation's top energy trader has gone from Wall Street darling to pariah in a few weeks and now faces a cash crunch so dire it is seeking a merger with the much-smaller Dynegy.

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Equity Mutual Funds Its credit ratings have fallen to near-junk levels in recent weeks, making it difficult to get money to boost investor confidence and back the trading operations that provide 90 percent of Enron's income. The company reportedly has been seeking investors to provide a cash infusion for an equity stake.

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Birmingham Contact Equity Word about a possible Dynegy-Enron deal leaked out on Wednesday, and on Thursday the two companies confirmed talks about a possible ''business combination'' were underway, but said no agreement had been reached.

Private Equity Investment Firm Sources told Reuters that the two Texas rivals, whose headquarters are a few blocks apart in downtown Houston, were talking about a stock swap with a moderate premium for shareholders and a $1.5 billion capital infusion from ChevronTexaco Corp., which owns 26.5 percent of Dynegy.

Complying Deal Equity Funds The stock swap is valued at about $8 billion, or about $10 a share, The New York Times reported on Thursday.

Equity Msn Private Wyoming A merger would catapult Dynegy to the top of the energy trading industry now dominated by Enron. Last year, the company had $29 billion in revenues, compared to $100 billion for Enron.

American Equity Investment For Enron, it would cap an astonishingly rapid fall from grace.

Equity Index Funds Enron stock has lost $19 billion in market value since its crisis began in mid-October and was down another 45 cents to $8.60 in Thursday trading. Dynegy shares rose $3.87 to $36.87.

Equity Private Team Wyoming Enron restated its earnings going back to 1997, saying its auditors advised that the off-the-balance sheet deals in question should have been included in the company's financial statements.

Equity Group Investment The restated results reduced Enron's net income by $591 million, or 22 percent, from 1997 to 2000, and increased its debt by $628 million, or 6 percent, after two of the partnership's financial statements were consolidated into Enron's earnings.

Capital Development Equity Enron said the restatement reflects a $1.2 billion reduction to shareholders' equity that touched off the current controversy when the company offhandedly disclosed it last month. Angry shareholders suddenly worried that Enron was hiding other liabilities in its complex financial statements and began demanding more information.

Article Between Difference In a statement, Enron chief executive Ken Lay said the company hoped it had allayed Wall Street fears with Thursday's announcements.

Contact Equity Private Wyoming ''We believe that the information we have made available addresses a number of the concerns that have been raised by our shareholders and the SEC about these matters,'' he said.

Agreement Equity Investment Analysts, wary after last month's surprise revelations, said Enron may have more to release, but they were pleased it was finally coming forth with information.

Business Equity Funds ''It's an attempt to come clean,'' said Raymond Moore, an analyst with Weatherly Securities.

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