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Calgary Herald: Exxon rumour boosts Imperial

Shares of Imperial Oil Ltd., Canada’s largest oil company, rose more than four per cent, gaining for the seventh time in eight sessions amid speculation that parent ExxonMobil Corp. will acquire the remaining 30 per cent stake it doesn’t already own.

The stock rose $2.26, or 4.5 per cent, to $52.25 Cdn on the Toronto Stock Exchange, the biggest one-day gain since Oct. 23.

The shares have soared 20 per cent since May 9 as the Calgarybased company joined other oil producers with refining operations in benefiting from improved margins for producing gasoline and other fuels.

“The refining margin story does account from some of the rise in Imperial,” said Jim Hall, a fund manager at Mawer Investment Management in Calgary who manages about $850 million Cdn including 550,000 Imperial shares, “but I don’t think it accounts for the whole rise. It’s a pretty big move.’

Speculation that Irving, Texas-based ExxonMobil will buy out minority shareholders in its Canadian unit may have accelerated after Royal Dutch Shell PLC agreed to purchase the 22 per cent of Shell Canada Ltd. it didn’t already own, Hall said.

Hall said the chance of ExxonMobil’s buying out its Canadian unit “is less than 50 per cent” because the company has more profitable investment opportunities elsewhere.

“Exxon has lots of cash to do things with, but I’d be somewhat surprised if this was the best use of capital,” he said.

Cash holdings at ExxonMobil, the world’s largest oil company, swelled to $34.6 billion at the end of the first quarter.

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