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Enron shares fall further
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November 23, 2001: 4:58 p.m. ET
Due diligence on Enron-Dynegy merger to continue this weekend.
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NEW YORK (CNN/Money) - Shares of Enron Corp. dropped a further 6 percent Friday as the troubled energy company continued to insist that its $9 billion merger with Dynegy Inc. was not in trouble.
Investment bankers involved in the merger will be studying Enron's books this weekend and due diligence on the deal is expected to carry on into the coming week, a source familiar with the situation told CNN/Money.
"We are continuing due diligence through the weekend and it's not going to end Sunday," the source said. "It's a big deal."
J.P. Morgan and Citigroup's Salomon Smith Barney are each expected to provide $250 million in additional financing to Enron, with an announcement coming soon, the source said.
Houston-based Dynegy agreed Nov. 9 to acquire Enron in a more than $9 billion takeover. Since the announcement, Enron's (ENE: down $0.30 to $4.71, Research, Estimates) shares have plummeted 45 percent and the troubled energy company revealed earlier this week that a $690 million debt would come due next week.
Enron's falling share price has led many to believe that Dynegy could walk away or at least renegotiate the takeover. Enron shares have dropped 94 percent from their year high of $84.87.
In contrast, Dynegy's (DYN: up $0.64 to $40.40, Research, Estimates) stock gained nearly 2 percent Friday.
However, rivals may be looking to scuttle the transaction. "Some investment banks not involved in the deal are bad-mouthing it," the source said. "They're taking knives."
Earlier this week, Fitch also speculated on the chances of Dynegy re-evaluating its planned Enron takeover. "In light of recent developments Dynegy's position regarding the merger must be considered less certain," the rating agency said.
Houston-based Enron, for its part, continues to claim all is fine. "There is no renegotiation," a spokeswoman said Friday. "It is our understanding that the merger is going forward as previously announced."
Dynegy could not be reached for comment.
Enron received a reprieve earlier this week on its $690 million debt note and will not have to pay until mid-December. Dynegy said Wednesday that it was encouraged by the extension and hopes to speed regulatory approval of the merger. 
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