Market sentiment hurt by delay in acquisition, as Chevron (CVX.US) and Hess (HES.US) both fell in price.

Shares of Hess (HES.US) and Chevron (CVX.US) fell on Thursday after the companies said arbitration hearings related to a potential Exxon Mobil (XOM.US) acquisition would be at least delayed until May 2025. The two oil giants had previously said they expected to make a decision by the end of 2024.

The gap between Hess's trading price and Chevron's all-stock offer has widened to nearly $15, the largest since the deal was announced last October, indicating growing concern about the deal's prospects. Exxon Mobil said Chevron's bid for Hess triggered a "first right of refusal" clause in their joint operating agreement in Guyana. The companies dispute that claim.

Shares of Chevron have underperformed Exxon Mobil by more than 10% so far this year, according to Birkhataria of Royal Bank of Canada Capital, "and recent setbacks or a longer duration of the saga could weigh on investors."

While investors initially focused on the premium Chevron would pay for Hess and the lack of synergies, Borkhataria said investors have accepted the deal "so if the issues continue or the deal ultimately fails, we could see further downside in Chevron shares."