Chevron, Texaco reopen merger talks

Senior executives of both companies have been in negotiations for several weeks and talks have accelerated over the last few days, the Financial Times reported.

A Texaco spokesman declined comment on the report, noting the company does not comment on speculation. Chevron officials could not be immediately reached for comment. The newspaper said people close to both companies confirmed that negotiations were heating up.

Texaco is considered an attractive target because its shares trade below other major oil stocks on a price-to-earnings ratio of 11 times. A merger would reinforce Chevron8217;s position in West Africa, the newspaper noted.

This would be the second time that Chevron and Texaco considered a combination. Earlier talks collapsed in the spring over disagreement on the deal8217;s price and which company would control the board.

The Financial Times reported that Chevron Chief Executive David O8217;Reilly has been more conciliatory in his approach to Texaco, willing to structure the agreement in a way that would be more acceptable to Texaco.

Shares of Chevron closed Friday 84-1/4, off a year high of96-15/16 but up from a low of 70. Texaco shares ended at 55-1/8, off a high of 67-3/16 and up from a low of 44-1/4.