Valero Bidding War on the Horizon?

Shell among three possible suitors

SAN ANTONIO -- Valero Energy Corp. stock spiked up nearly 10% yesterday on rumors the company could soon be the subject of a bidding war.

The U.K.'s Daily Mail reported that Royal Dutch Shell and "cash-rich Indian refiner and explorer Reliance Industries" are both being bandied about as possible suitors for the San Antonio-based refiner and retailer, which owns and operates 15 refineries worldwide.

Valero spokesperson Bill day told CSP Daily News this morning that he could not comment on speculation.

Reliance Industries, which is owned by billionaire Mukesh Ambani, is reportedly poised to launch a $48 a share cash offer for Valero, whose shares were trading sharply lower at $21.30 early on Wall Street amid talk of trouble at one of its U.S. refineries, according to the newspaper report.

Citibank and JP Morgan are believed to be currently advising on a big deal in the energy sector that "could break any day," the newspaper reported. Should Valero come under attack from Reliance, analysts do not rule out the possibility of not only Royal Dutch Shell but China’s CNOOC getting involved.