Subject: Recommended Offer by ICE for IPE Holdings
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked]
Date: Wed, 16 May 2001 12:30:00 -0700 (PDT)

Greg,

Michael asked me to get back to you regarding ICE's all-share Offer for IPE.

Summary of Offer

The key aspects of the Offer are as follows:

? It comprises a share-for-share exchange of 1 ICE Class A1 Share and 1 ICE 
Class B (Redeemable) Share for each IPE Share (note that ICE Shares are not 
listed on any exchange).

? The following values (given by Goldman Sachs and KPMG) have been ascribed 
to each such ICE Share:

 - each ICE Class A1 Share has an estimated value ranging from $1.75 to $6.11
 - assuming redemption, each ICE Class B Share has an estimated value ranging 
from $4.80 to $5.33
 - assuming no redemption, each ICE Class B Share has an estimated value in 
the same range as each A1 Share

? Class B Shares allow for certain rights of redemption by ICE for cash, 
namely $5.895 per share.  Redemption rights arise for a period of one month 
from the first anniversary of the date on which the IPE Brent Futures and the 
Gasoil Futures Contracts have traded exclusively for 10 consecutive trading 
days through the electronic trading platform.  Redemption rights also arise 
in other circumstances, e.g. if ICE is the subject of an insolvency event.  
After the first redemption event to occur, non-redeemed Class B Shares 
(redemption is at the option of the shareholder) automatically convert to 
Class A1 Shares.

? Although ICE Shares will not be listed, it is expected that there will be a 
limited dealing facility through which Class B shareholders will be able to 
trade.

? The electronic trading platform referred to above will be developed by ICE 
through a technical services agreement.

? Class A Shares are transferable to any transferee, subject to ICE board 
consent, not to be unreasonably withheld.  Other than in relation to the 
redemption rights described above, Class B Shares have identical rights to 
Class A Shares.

? Assuming all of the IPE Holdings shares are acquired by ICE, then the IPE 
Holdings' shareholders will hold 10% of the issued share capital of ICE.

? The Offer is subject to valid acceptances being received by 29 May in 
respect of at least 90% of the value of IPE Holdings shares (or any lower % 
determined by ICE, but being at least 50%).

Other Points to Note

? Enron's current shareholding in IPE Holdings is 136,720 shares (this is 
equivalent to 1.19% of the total share capital of IPE Holdings).

? Those members of ICE (or companies associated with members of ICE) having 
shareholdings in IPE Holdings account for 9.83% of the total share capital of 
IPE Holdings. You should therefore assume that acceptances will be received 
at least as to 9.83%.

? If ICE receives acceptances as to 90% or more of the IPE Holdings shares, 
then our shares in IPE Holdings can be mandatorily acquired.

? If we are to make a competing offer, we will needed to have appointed a 
financial advisor, carried out necessary due diligence and preferably 
discussed details with IPE's management. Bearing in mind the closing date of 
29 May, we would have to move quickly if we are to make an offer. (This is 
assuming that acceptances in excess of 50% have not been received by that 
time - however, institutional investors tend to deliver acceptances only at 
the last minute).  We could make an announcement prior to the closing date of 
29 May that we were considering making an offer, although the prior approval 
of the Takeover Panel would be needed  - and a short timetable would be set 
by the Panel for announcing full details of the offer, if we were to 
proceed.  

? Given the particular components of ICE's offer (e.g. retained equity in 
ICE; the complementary nature of the ICE and IPE businesses; and the critical 
participation of ICE in developing IPE's electronic trading platform), we 
should consider carefully the terms of any competing offer we may decide to 
make. 

Please would you let me know what further steps you would like to take 
(including whether you would accept the ICE Offer), and if there is any 
further information you need. (I will send you separately by fax a copy of 
the Offer Document).

Thanks
Justin