Tesoro Shares Fall on Doubts Over Deal
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Tesoro Petroleum Corp. shares plunged 30% to an eight-year low because the company may not complete a $1.13-billion purchase of a California refinery from Valero Energy Inc. amid falling earnings and rising debt.
The stock fell $3.11 to $7.25 on the NYSE. Valero, one of the largest U.S. refiners, dropped $1.79 to $41.80, also on the NYSE. Both companies are based in San Antonio.
Tesoro reported a $55.6-million first-quarter loss Wednesday, which may leave it with too high a ratio of debt to earnings under one of its lending covenants.
Valero agreed to sell the Golden Eagle refinery near San Francisco to win regulatory approval of its $5.45-billion purchase of Ultramar Diamond Shamrock.
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