By the OGJ Online Staff
HOUSTON, Nov. 26 -- Enron Corp. shares slipped another 15% Monday, closing at $4.01 in another day of heavy trading.
The closing price is about 60% below the value of Dynegy Corp.'s offer of the equivalent of $10.54/share based on Dynegy's Monday close of $39.25, down $1.15 for the day. Investors seemed to increasingly doubt the deal would close on the original terms, despite reassurances last week by both companies that it was not in jeopardy. The merger agreement includes various clauses that would allow Dynegy to possibly back out under certain circumstances.
Enron shares are down 95% from a February 52-week high of $84.87, reflecting a sharp loss of confidence after the company reported a third quarter loss, restated earnings, took large write offs, and disclosed more information about a series of off-balance sheet partnerships.
Enron stock fell as low at $3.76/share Monday before rebounding slightly. Volume totaled 66.8 million shares on the New York Stock Exchange.
Last week Enron reported it was talking with its primary lenders about restructuring its debt obligations to boost liquidity.
Jeffrey McMahon, Enron chief financial officer of Enron, said the maturity on a $690 million note that had been due Monday, was extended to mid-December, providing time to restructure the debt.
Last Wednesday Dynegy Chairman Chuck Watson said the company was continuing its due diligence and working to accelerate the regulatory approvals required to complete the merger in accordance with the previously announced agreement.
He also noted that ChevronTexaco recently reiterated that it has "full confidence in Dynegy's disciplined management approach to complete the merger and to build a new company into an industry leader." ChevronTexaco owns 26% of Dynegy's outstanding common stock.
