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Citi eyes Enron unit?
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December 21, 2001: 6:47 a.m. ET
Report says Citigroup poised to be leading bidder for energy trading unit.
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NEW YORK (CNN/Money) - Citigroup could be the leading bidder for Enron Corp.'s energy trading business, according to a published report.
The Wall Street Journal, quoting unnamed sources familiar with the matter, reported Friday that the banking and insurance company is close to making a bid for the Houston-based company's flagship operation. A bankruptcy court auction of the unit is set for Jan. 10.
The paper said that if Citigroup's Salomon Smith Barney investment banking arm strikes a deal with Enron for the operation and UBS AG or another bidder fails to top it, then Citigroup (C: Research, Estimates), the nation's largest banking and insurance firm, would become what is known as the "stalking horse" or bidder to beat in the process.
The paper said that UBS also has been trying to negotiate a bid for the unit, but said it couldn't be determined if it was still in the running. The paper said spokesmen for Citigroup, UBS and other potential bidders refused to comment on the report.
J.P. Morgan Chase & Co. (JPM: Research, Estimates), the nation's No. 2 bank, said Wednesday that its stake in Enron (ENE: Research, Estimates) that is secured by assets stands at $965 million, or more than double the amount it previously disclosed. It also announced it has filed lawsuits against several top insurance companies, including Citigroup's Traveler's insurance unit, that issued contracts, or surety bonds, guaranteeing Enron assets.
Citigroup announced earlier this week it was planning to spin off 20 percent of Traveler's through an initial public offering that could raise $5 billion. 
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