Tesoro Shares Fall on Doubts Over Deal

Tesoro Petroleum Corp. shares plunged 30% to an eight-year low because the company may not complete a $1.13-billion purchase of a California refinery from Valero Energy Inc. amid falling earnings and rising debt.

The stock fell $3.11 to $7.25 on the NYSE. Valero, one of the largest U.S. refiners, dropped $1.79 to $41.80, also on the NYSE. Both companies are based in San Antonio.

Tesoro reported a $55.6-million first-quarter loss Wednesday, which may leave it with too high a ratio of debt to earnings under one of its lending covenants.

Valero agreed to sell the Golden Eagle refinery near San Francisco to win regulatory approval of its $5.45-billion purchase of Ultramar Diamond Shamrock.