Huntsman Corporation agreed to a $10.6-billion takeover bid by Apollo Management
group''s portfolio company Hexion Specialty Chemicals Inc., hours after its agreed-to
merger partner Basell Holdings BV said it would not raise its offer. (See:
Basell Polyolefins to buy Huntsman)
Lake City-based Huntsman said its board approved Hexion''s bid to buy the company
for $28 a share which was "superior" to the one made by Dutch plastic-components
maker Basell Holdings BV, which offered $25.25 a share, or $9.6 billion. (See:
Hexion''s $ 10.8-billion offer outbids Basell for
Huntsman acquisition) Hexion, run by Leon Black''s buyout firm Apollo Management
LP, will pay Huntsman investors $6.54 billion and $100 million towards breakup
fee. The total value of the acquisition, including provision of $4 billion for
Huntsman''s assumed debt, would add up to $10.6 billion.
is the world''s largest maker of epoxy adhesives. The company manufactures and
markets chemicals for many global industries, including automotive, aviation,
textile, footwear and technology. Huntsman has 14,000 employees and more than
75 operations in 24 countries, and reported $13 billion in 2006 revenue.
is the top producer of adhesives used in plywood. Hexion makes binder, adhesive,
coating and ink resins for a variety of industrial applications. Hexion posted
revenue last year of $1.31 billion.
combined company will be one of the world''s largest specialty chemical makers.
initial offer, made last week, was to buy Huntsman for $27.25 per share, but on
Monday it boosted the price to acquire the company. (See: Apollo
raises bid for Huntsman to $6.5 billion)
merger would, however, involve a "lengthy and complex" regulatory approval
process. Hexion will also boost its offer price by 8 per cent if the deal fails
to close within 270 days.
expects the acquisition to close in the first quarter. The company has 12 months,
subject to a 90-day extension by Huntsman, to complete the transaction. Hexion
agreed to pay Huntsman $325 million should the deal fail to close.
transaction has been approved by Huntsman family members and private equity firm
MatlinPatterson Global Opportunities Partners LP, led by David Matlin, which own
a combined 57 per cent of the outstanding shares.