Huntsman confirms talks that may lead to sale
Tue Jan 31, 2006 6:46 PM ET
NEW YORK, Jan 31 (Reuters) - Chemical company Huntsman Corp. confirmed on Tuesday it has held discussions with a number of suitors that may lead to a sale of the firm or a merger.
Shares in Huntsman rose more than 11 percent to $21.62 on Tuesday on the New York Stock Exchange, following news reports the Salt Lake City, Utah-based company was in talks with private-equity firms and industry players to be bought for more than $4.3 billion.
The Wall Street Journal reported earlier on Tuesday that buyout firm Apollo Management LP is considered a leading candidate for Huntsman, which went public last year.
Huntsman, which has a current market value of about $4.27 billion, said in a statement after Tuesday's stock market close that in late 2005 it received an indication of interest regarding an acquisition of the company.
Huntsman said it engaged financial and legal advisers to assist it in evaluating a sale and other alternatives to enhance shareholder value.
The company said it engaged Merrill Lynch & Co. and SG Cowen & Co., LLC as financial advisers, and Vinson & Elkins LLP and Weil, Gotshal & Manges LLP as legal advisers.
Huntsman said there can be no assurance of any transaction.
Chairman Jon Huntsman, other members of the Huntsman family and private equity firm MatlinPatterson indirectly own 58.7 percent of Huntsman's outstanding shares, according to the latest proxy filing.
Also on Tuesday, ratings agency Standard & Poor's placed its ratings on Huntsman and affiliate Huntsman International LLC on credit watch with negative implications.
"The credit watch listing indicates that the ratings would likely be lowered if such a transaction were to proceed, given the strong expectation that Apollo or other potential financial buyers would use a significant amount of debt in any financing plans," said Standard & Poor's credit analyst Kyle Loughlin.
Standard & Poor's said higher ratings for Huntsman "are considered a less likely outcome, but are possible, if one of a few financially stronger strategic buyers were to pursue a combination that preserved credit quality."
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