|
News
Font Size: 
July 2, 2008 |
The proposed US $10.6 billion ($10.8 billion CDN) deal between Huntsman Corp., Salt Lake City, UT, and Hexion Specialty Chemicals Inc., Columbus, OH, controlled by private equity firm Apollo Management, is not likely to go through after both companies filed lawsuits a week apart. The July 2007 deal would have seen Hexion acquire Huntsman.
Last week, Hexion filed a lawsuit and said in a statement that it did not think it would be able to acquire Huntsman Corp. because of the company's increased debt and lower-than-expected profits. Huntsman's first quarter (2008) profit fell 84 per cent as the weaker dollar and higher priced raw materials and feedstocks ate away at higher revenues. Earnings for the three months ended March 31 were US $7.3 million ($7.4 million CDN), down from US $46.6 million ($47.3 million CDN) in the first quarter of 2007. Hexion said in a statement that it believes the agreed capital structure for the combined company is no longer viable. The lawsuit alleges that Huntsman has suffered a “material adverse effect” that would allow Hexion to back out of its merger agreement. Hexion said going forward with the acquisition with that capital structure would render the combined company insolvent.
This week, on Monday, Huntsman fired back with its own lawsuit against Apollo Management seeking more than US $3 billion ($3.05 billion CDN) in damages.
Huntsman lawsuit claims that Apollo had induced Huntsman to end a merger deal with Dutch company Basell AF to forge a merger with Hexion.
“It is now clear that, to get Huntsman to terminate its contract with Basell, Apollo falsely represented to Huntsman its commitment to closing a merger with Hexion at $28 per share, when it really intended all along to then delay the process and create enough problems with the transaction to bring us back to the table at a lower price,” Huntsman chief executive and president Peter Huntsman said in a statement.
In Canada, Hexion Specialty Chemicals' coatings and composite resins are sold through Univar Canada Ltd., Richmond, BC. Huntsman Tioxide's titanium dioxide products are sold through L.V. Lomas Ltd., Brampton, ON.
Sources:
www.huntsman.com
www.hexion.com
www.bloomburg.com
www.icis.com
www.reuters.com
News Archives
|
leftnav.html
