Essar Oil is trading at its highest level in last four years, after news of Russian oil giant OAO Rosneft's interest in buying 49 percent of the company for $1.64 billion.
Essar, owned by billionaire brothers Shashikant and Ravikant Ruia, might announced the deal later today after ongoing talks in Moscow. "The talks have narrowed down to valuation ad an announcement is expected anytime," said a banker close to the deal, according to this report in Business Standard.
Rosneft, the world's largest publicly traded oil company, pumps 40 percent of Russia's oil. Essar Oil is India's second largest private oil refiner, and owns a 400,000-barrels-per-day refinery in Vadinagar, Gujarat. Essar Oil's shares have soared 43 percent over the last four trading sessions on expectations of the deal going through.
“It is not our policy to comment on market speculations,” a spokesperson for Essar Oil said in a statement.
The two companies have worked together before. In December, Essar Oil had signed a deal with Rosneft to import 10 million tonnes of crude oil a year for 10 years. The deal was valued at $40 billion according to the price of oil at the time.