Shares in US oil group Phillips Petroleum tumbled 10 per cent in early New York trading yesterday as the market digested its surprise $6.1 billion (€6.5 billion) takeover of Tosco, the independent refining business planning to buy the assets of the Irish National Petroleum Company (INPC).
Phillips shares were down $5.69 at $52.44, valuing its all-share bid for Tosco at $41.95 a share. Tosco shares were up sharply, rising $4.98 to $39.59. Investors were startled by the deal because it marked a departure from Phillips' previously stated strategy of devoting more resources to its exploration and production activities.
Following the integration of Tosco, Phillips will be the second largest refining group in the US, behind Exxon Mobil.
Phillips had previously said it was seeking a joint venture partner for its refining businesses. But after failing to find a partner, the firm decided it could exploit similar economies of scale by buying Tosco.
Tosco's plans to buy the assets of the INPC for $100 million were announced last year but the possible effects of the Phillips takeover on the deal were not clear last night.
Investors' reaction to the Phillips takeover prompted renewed speculation that a predator might try to buy Phillips.
