This NY Times article reports on Enron Corp.’s announcement today that, subject to Bankruptcy Court approval, it has agreed to sell for $1.8 billion its most valuable remaining pipeline assets to a company run by colorful Houston billionaire Oscar Wyatt, Jr.
Enron’s pipeline and power assets have never been part of the company’s troubled businesses that led it into bankruptcy in late 2001. Enron will sell CrossCountry Energy Corp. — which owns outright or has stakes in three North American natural-gas pipelines — to Wyatt’s company, NuCoastal LLC. As a part of the deal, NuCoastal would also assume $430 million in debt from the 2,600-mile Transwestern Pipeline in the deal.
Mr. Wyatt, who is 79 years old, has long been one of Houston’s most outspoken businessmen. He founded Coastal Corp. and turned it into a natural gas giant before retiring as its chairman in 1997. El Paso Corp. bought Coastal in 2001 for $22.6 billion, and Mr. Wyatt’s public (and caustic) displeasure with El Paso’s management generated an unsuccessful proxy battle to oust El Paso’s board last year. Another example of Mr. Wyatt’s outspoken nature was his public opposition to Operation Desert Storm in the first Iraq War in 1991, which was led by fellow Houstonian President George H.W. Bush.
Mr. Wyatt’s company may still be outbid for CrossCountry Energy because bankruptcy courts generally award the assets to the highest bidder until the deal is approved. If that occurs, Mr. Wyatt’s company will likely receive a generous “stalking horse” fee, which is usually a percentage of the ultimate purchase price.