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Enron trading ops get bids
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December 10, 2001: 12:38 p.m. ET
Citigroup, UBS plan rival bids for flagship biz, JP Morgan still interested.
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NEW YORK (CNN/Money) - Citigroup Inc. and UBS AG are continuing negotiations to take control of Enron Corp.'s trading operations and plan to issue rival bids, sources close to the situation told CNN/Money.
Both UBS and Citigroup are each planning to pitch a joint venture with Enron. The humbled energy trader would likely receive a minority stake in the company, known as Enron Online, sources said.
The bids from UBS (UBS: up $0.10 to $51.97, Research, Estimates) and Salomon Smith Barney, a unit of Citigroup (C: down $0.84 to $48.37, Research, Estimates), would call for the banks to take a controlling stake in the energy operations, sources said.
Both UBS and Citigroup declined comment. Houston-based Enron could not be reached for comment.
Shares of Enron surged 12 percent in early afternoon trading on Monday.
CNN/Money reported last week that J.P. Morgan Chase and UBS Warburg were each in talks with Enron to form a venture of the energy operations.
J.P. Morgan (JPM: down $1.25 to $38.52, Research, Estimates) is still interested in the energy operations but is currently evaluating its options, a source with knowledge of the situation said.
Salomon and J.P. Morgan advised Enron in its failed merger with Dynegy Inc. Enron also secured $1.5 billion in so-called debtor-in-possession financing from J.P. Morgan and Salomon after it filed the largest corporate bankruptcy in U.S. history.
Enron's fortunes turned almost on a dime over the past few months after allegations of improper dealings by company officials nearly halted its trading business. That helped unravel a proposed merger with rival Dynegy (DYN: down $2.73 to $27.55, Research, Estimates), forcing Enron to file for Chapter 11 bankruptcy protection on Dec. 2.
A deal with a large bank could restore confidence among former traders with Enron and reverse any ill will, the Wall Street Journal reported Monday.
Finalized bids would likely be presented to the New York federal bankruptcy court as quickly as possible. Enron's advisers, which include Blackstone Group and Weil Gotshal & Manges LLP, are likely to press the court for quick bid approval, the Journal said.
Separately, an Enron spokesman told the Journal that it paid $50 million to 75 most-valued employees in the trading operation as part of its failed merger with Dynegy.
This payment was separate from the $55 million to be distributed to about 500 employees who agreed to stay on at Enron for at least 90 days after the bankruptcy filing.
Enron laid off an additional 200 employees Friday.
Blackstone and J.P. Morgan declined comment. Weil Gotshal could not be reached for comment. 
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