News / Utah / 

Huntsman Corp. Accepts Bid from Apollo

Huntsman Corp. Accepts Bid from Apollo



Estimated read time: 3-4 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

SALT LAKE CITY (AP) -- Chemicals maker Huntsman Corp. agreed to a $6.5 billion buyout offer from an affiliate of Apollo Management LP on Thursday, terminating an earlier deal to sell itself at a lower price to a Dutch company.

Apollo, through its Hexion Specialty Chemicals Inc. unit, had offered $28 a share in cash for Huntsman which had previously accepted a $25.25 a share offer from the Dutch manufacturer Basell AF.

Huntsman gave Basell until Wednesday to raise its bid but said Basell failed to do so.

"We had a deal and we were very comfortable with that. We stick with that deal," said Basell spokeswoman Patricia Vangheluwe.

Huntsman CEO and president Peter R. Huntsman said he couldn't ignore a bid that was hundreds of millions of dollars higher than a deal he hatched with another suitor.

Huntsman's board approved the Apollo deal and has recommended that shareholders vote in favor.

Huntsman said his company wired a "mind-boggling" $200 million breakup fee to Basell, which is controlled by U.S. industrialist Len Blavatnik's Access Industries Inc. Hexion agreed to reimburse half of the amount of the fee.

Blavatnik was "quite disappointed -- $25.25 was a good price at the time, but with Apollo bidding at $28, that was something to consider," Huntsman said in Houston before boarding a plane Thursday for Salt Lake City, where his company is based. It operates from The Woodlands, Texas.

He conceded a Huntsman-Hexion combination will have a harder and longer time gaining antitrust approvals in the U.S. and Europe because the overlap between the two chemical businesses.

"There are areas of overlap in the business, but we're confident we'll get through the Federal Trade Commission," he said.

To compensate for delays, Hexion agreed to pay a 8 percent annual premium for Huntsman shares if the closing takes longer than nine months, he said.

Huntsman said he didn't know if Hexion would keep him or his team of executives on over the long run -- an arrangement he had with Basell.

Craig Morrison, the 51-year-old chairman and CEO of Hexion, said it had yet to figure out how the two companies' management teams would mesh or whether any consolidation would result in plant closings.

To win Huntsman, Apollo raised its bid to $28 a share when it was already the high bidder at $27.25, which "really came down to strategy and optimizing the chance of landing the deal," he said.

It seemed to work.

"People will always question if we could have got there without the higher bid," Morrison said in an interview from Columbus, Ohio. "We're very pleased with the outcome."

Apollo made a tentative move to buy Huntsman Corp. about 1 1/2 years ago, then approached Huntsman more recently, after it announced an agreement with Basell.

"We have a lot of shared markets, so there's a lot of overlap. We provide products to each other, so there's significant upstream and downstream synergies," Morrison said.

Apollo founding partner Joshua J. Harris said the combined company will have annual sales of more than $14 billion and more than 21,000 associates and 180 facilities around the world.

Morrison noted the deal gives the company expanded reach in the Asia-Pacific region.

The acquisition is also subject to shareholder approval. Entities controlled by MatlinPatterson and the Huntsman family, which collectively own about 57 percent of Huntsman's common stock, support the deal.

"We have complementary businesses and, together, will have an even stronger technology platform from which to serve our customers," said Peter Huntsman.

Huntsman founder and Chairman Jon M. Huntsman added that a sale is in the best interests of the company's shareholders.

Huntsman shares dropped $1.15, or 4.2 percent, to $26.40 in morning trading. The stock has traded between $9.36 and $13.95 during the past 52 weeks.

AP Business Writer Kristen A. Lee in New York and Associated Press Writer Mike Corder in The Hague, Netherlands, contributed to this story.

(Copyright 2007 by The Associated Press. All Rights Reserved.)

Most recent Utah stories

Related topics

Utah

SIGN UP FOR THE KSL.COM NEWSLETTER

Catch up on the top news and features from KSL.com, sent weekly.
By subscribing, you acknowledge and agree to KSL.com's Terms of Use and Privacy Policy.

KSL Weather Forecast