Huntsman Sues Apollo, Two Partners for Fraud
Monday, June 23, 2008
Hexion Specialty Chemicals Inc. Monday said a fraud and tortious interference lawsuit brought by Huntsman Corp. against buyout shop Apollo Management LLC, which controls Hexion, is without merit.
Huntsman's suit, filed Monday in a Texas court against Purchase, N.Y.-based Apollo and partners Leon Black and Joshua Harris, says Apollo persuaded Huntsman to drop out of a June 2007 acquisition agreement with the Dutch chemical company Basell by falsely representing its intent to buy Huntsman at a price that beat Basell's offer. Instead, Apollo allegedly planned to "delay the process and create enough problems with the transaction to bring us back to the table at a lower price," Huntsman said.
Huntsman accepted Hexion's $28-per-share offer in July last year. The company is based in Salt Lake City and The Woodlands, Texas.
Last week, Columbus, Ohio-based Hexion sued Huntsman in a Delaware court, saying it didn't want to proceed with the merger agreement because Huntsman's financial performance had deteriorated to the point that a combined company would be insolvent.
In a statement Monday, Huntsman Chief Executive Peter Huntsman said the firm "is a strong and profitable" and that it has "ample financial resources to continue operating" its business.
Hexion said Huntsman's lawsuit "violates a clear provision of the merger agreement, which requires that any litigation be brought exclusively in the state of Delaware" and that the suit doesn't dispute that the combined company would be insolvent.
Shares of Huntsman were trading down 10 cents at $12.74.
Source: AFX News Limited
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