UBS snags Enron's online assets

Computerworld - As scandal continued to surround Enron Corp. last week, UBS Warburg quietly snatched up the IT infrastructure of the energy giant's online gas and power trading operation, for no money down.
The deal, approved by the U.S. Bankruptcy Court in New York on Jan. 18, could turn out to be a coup for UBS, since many experts considered the trading operations to be the keystone in Enron's one-time position as the seventh-largest company in the U.S. But UBS, which will assume none of Enron's past, current or future liabilities or trading positions, faces challenges in its bid to return EnronOnline to glory, including persuading energy traders to bring their business back to the online exchange.
UBS plans to hire many of the 800 people now employed in Enron's trading operation and is eyeing IT staff in particular, said UBS spokesman David Walker.
"Traders are very important, but equally so are the tech personnel who will be needed to keep the systems running," Walker added.
UBS Warburg will assume control of Enron's online trading operations, including the trading facility's vast IT infrastructure.
According to Walker, the investment bank is looking to re-establish the Enron gas and electric trading business using what it believes to be the gold standard for IT infrastructures in the world of online exchanges.
EnronOnline is no small operation. The deal involves thousands of Compaq Computer Corp. PCs, Sun Microsystems Inc. Unix farms and third-party software licenses from Microsoft Corp., Oracle Corp. and Tibco Software Inc., among others. UBS Warburg, the investment banking arm of Swiss bank UBS AG, will license the proprietary software developed by Enron for the trading operation and receive the source and object codes for that software.
A Nice Deal
UBS Warburg will also gain rights to the patents Enron has filed relating to the functionality that allows a single user to buy and sell with multiple counterparts, as well as its automated trading capabilities.
Not a bad bet, considering that the move will cost UBS little. It will pay for the operation, the licenses to use Enron's proprietary software and the office space to house the facilities out of its profits for the next decade. In return, Enron will net 33% of the profits generated by the new trading entity for the first year, with that figure dropping to 22% and then 11% in coming years.
But UBS must woo back shaken traders who have fled to rival exchanges in recent weeks - and that's no easy sell. "Infrastructure's only as good as