Dynegy, Chevron/Texaco Bailout For Enron?Dynegy, Chevron/Texaco Bailout For Enron?

Enron Corp., the energy buyer and seller that runs what was touted only a few months ago as a shining example of the viability of industry-specific business-to-business exchanges, is now struggling to remain afloat and is reportedly a takeover target.

Dynegy Inc. was in talks Wednesday to invest $2 billion in Enron, according to published reports. Chevron/Texaco Corp., which owns a 27% stake in Dynegy, was also reportedly considering an investment of $1.5 billion in the struggling Enron, which secured $1 billion in financing last week from J.P. Morgan and Salomon Smith Barney.

According to one report, the Enron-Dynegy talks could result in a Dynegy-Enron merger to save the floundering energy company. The high-stakes bailout may come at just the right time. Enron's stock price plunged this week to the $9 range, a nine-year low and an 89% decline from its 52-week high of $84.87. Enron has reportedly been eyed as a takeover target by General Electric Co.'s GE Capital, Warren Buffett's Berskshire Hathaway, and Royal Dutch Shell.

Enron's troubles apparently have little to do with E-business capabilities. Late last month, Enron came under investigation by the Securities and Exchange Commission for transactions with partnerships organized by CFO Andrew Fastow that resulted in a $1.2 billion reduction in shareholder equity. Its stock price has been hammered in the days following announcement of the investigation.