Rumors of Exxon Buyout of Imperial Oil 'Unfounded'

Shares of Imperial Oil Ltd. (IMO) continued to soar on Tuesday as investors, analysts and other observers scrambled to find out what was going on.

John Stephenson, senior vice president and portfolio manager at First Asset Funds Inc. said several things going on, but the main thing is a "totally unfounded rumor Exxon might buy the rest of Imperial Oil."

"The market in Canada is focused on who's the next acquisition target," he said.

Mr. Stephenson said a lot of people are asking why a major independent hasn't been taken out.

"I think you will see a day, maybe in the next year, when some of these companies are no longer independent," he added.

Mr. Stephenson doesn't own Imperial Oil shares and said if he did own them he'd be selling into this rally since there doesn't seem to be much basis for it.

The stock has seen a healthy run-up in the past couple of weeks, primarily due to strong refining margins, but Tuesday's gains are so substantial that merger and acquisition speculation has to be on the minds of some market players, according to one analyst.

Exxon Mobil Corp. (XOM) is the controlling shareholder of Imperial Oil.