Hexion rejects another Huntsman financing offer
Monday September 8, 3:19 pm ET
Hexion rejects $416 million financing offer by Hunstman before start of lawsuit to end merger
COLUMBUS, Ohio (AP) -- Hexion Specialty Chemicals Inc., which is seeking to quit a $6.5 billion buyout of chemical maker Huntsman Corp., on Monday rejected another bid by a Huntsman shareholder group to add $416 million in cash to finance the buyout.
Hexion is suing Huntsman in Delaware to free itself of the deal and a $325 million breakup fee. Last month it rejected a $500 million financing proposal from the same shareholder group, calling it inadequate.
Shortly before a trial was set to begin Monday, Hexion issued a statement knocking down the Huntsman offer, which was detailed in a filing with the Securities and Exchange Commission.
In July 2007, Huntsman accepted a $28-per-share buyout offer from Columbus, Ohio-based Hexion, an affiliate of Apollo Management LP, over a rival offer. But in June, Hexion announced that Huntsman's deteriorating finances no longer made the deal viable and it would back out.
Huntsman responded with a $3 billion lawsuit claiming Apollo never planned to go through with the deal and was instead trying to squeeze a rival bidder, Dutch manufacturer Basell AF.
"Today's proposal by Jon Huntsman and certain other Huntsman shareholders, received only hours prior to the beginning of the Delaware trial, does not come close to closing the funding gap or making the combined company solvent," Hexion said.
Neither the $500 million in financing in the previous proposal nor the $416 million is "remotely sufficient to result in the combined company being solvent," Hexion said.
"Of course, the Hexion board will study this proposal," it said.
On Aug. 29, Hexion rejected a Huntsman shareholder group's offer to invest at least $500 million in a combined entity. Citing the "dramatic increase in Huntsman's net debt and decrease in its earnings since last July, the proposal does not come close to making the combined company solvent, Hexion said.
Shares of Huntsman traded at $11.44, down $1.88, or 14 percent.
Source: Associated Press
Engineering News Archive