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Gold/Mining/Energy : Enron - Natural Gas Industry
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To: James Calladine who wrote (1091)12/4/2001 12:58:11 PM
From: buffaloha   of 1433
 
Interesting allegations in suit...

That Dynegy publicly vacillated on the deal "to maximize the uncertainty in the market among Enron's counterparties, and thus undermine the safety net the merger was supposed to provide to Enron." In essence, Enron claims that Dynegy allegedly dragged its feet to kill the deal and gain market share.

Enron cites the Nov. 21 Dynegy press release that speaks of its efforts to continue due diligence. ENE says this was misleading because due diligence is supposed to be done before the merger agreement. This announcement clearly was designed to affect the stock price at a point when investors were already nervous about the deal falling through. Enron quotes Dynegy President Stephen Bergstrom saying the company performed "considerable due diligence." A buyer can't pull out of a deal simply because it failed to do its homework and it certainly was given the information. Nope, this thing was either orchestrated by DYN from the beginning or it got this inkling midway through that it could gain market share and get the pipeline by killing ENE. The obvious downgrades from the bond and credit agencies, the idea that a huge short hedge had developed and the players in Wall Street lining up to play this like a fiddle has led to this situation.

Will Wall Street allow ENE to fail? Not if the big boys have any say about covering their positions once the shorts are shot and the DYN deal is exposed for what it is....
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