India's Reliance Industries Says It Will Not Buy Valero

SAN ANTONIO -- Indian petroleum refiner and explorer Reliance Industries said it will not buy Valero Energy Corp. The company issued a statement in response to an Oct. 26 story that ran in the UK Daily Mail stating that a bidding war to buy Valero could soon occur, with Reliance and Netherlands-based Royal Dutch Shell as the most likely acquirers.

Although companies rarely comment on takeover rumors, Reliance said it felt compelled to do so.

"Reliance wishes to dispel the rumors and announce it is not in discussions with Valero nor otherwise considering an acquisition of Valero," the company said in a statement, which was obtained by Reuters.

The original UK Daily Mail report said an acquisition by Reliance made a lot of sense because the company needed to expand upon its operating base of India. The news outlet added that Citigroup and J.P. Morgan Chase & Co. were believed to be advisors on the potential deal.

Although Reliance is not apparently a suitor for Valero, Shell could still be a bidder. According to reports, Shell representatives have declined to comment on the takeover speculation. In addition, China's CNOOC has been rumored as a potential bidder for the San Antonio based refiner and convenience retailer.

Valero's shares, trading under the symbol VLO on the New York Stock Exchange, dropped more than 7 percent today on the news. The stock rose more than 15 percent on Oct. 26 when word of a possible takeover was reported.