Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Valero acquistion by Reliance is crafted news

|Includes:Valero Energy Corporation (VLO), WNR

Note : Please exercise your own discretion for your trades .

Valero acquisition by Reliance / Shell looks like more of a story created by some traders to make money from the rumor . After El paso deal last week , it is a good time to make people believe another story on M&A . Since Reliance is looking out for acquisitions , building a story around that had high chances to fly . Speculation about Reliance looking for Valero is there since a year . This is not new .

Read this article from FT.COM in March 2010

http://www.ft.com/intl/cms/s/0/eee92c6a-...

Why this bid rumor is fake ?

1. Because Valero has been on expansion . While it is making profits & expanding why would it be open to get sold for other ?
2. Reliance will only buy companies if they are available for rock bottom prices . Its previous two attempts were both at failed / bankrupt companies . Valero is in good position now . Trying to buy valero now won't be cheap . So reliance may not bid for Valero now .

 I will be closing my Calls on Monday since on Tuesday we have earnings and the stock has moved a lot higher . Though the company will report good earnings , people will dump the stock since in the earnings call , Valero will rule out it is not open to sell the company now . This will bring the price back to 22 - 23 leves .


Stocks: VLO, WNR