Enron Confirms Dynegy Talks

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Enron

(ENE)

and rival energy trader

Dynegy

(DYN)

confirmed Thursday they were in merger talks.

According to reports, Dynegy held talks to acquire Enron for up to $8 billion in stock and to make an immediate cash infusion of up to $2 billion to help relieve Enron's debt crisis. The possible agreement is said to have the backing of

ChevronTexaco

(CVX) - Get Report

, which owns about a quarter of Dynegy.

Enron shares continued their recent fall, dropping 16 cents to $8.89, while Dynegy jumped $1.83 to $34.83.