Banks won't fund Hexion-Huntsman deal

NEW YORK (AP) -- The Huntsman chemicals company says two banks providing funding for its disputed takeover by Hexion Specialty Chemicals have backed out of the deal.

Huntsman Corp. sued the banks in September, charging they had interfered with the buyout.

Huntsman said early Tuesday, the day the buyout was expected to close, that it had been informed by Hexion that Credit Suisse and Deutsche Bank won't close on the buyout.

Hexion tried to walk away from the $6.5 billion takeover agreed to last summer, citing Huntsman's deteriorating finances. Salt Lake City-based Huntsman, which has its administrative headquarters in The Woodlands, Texas, took them to court and won.

Hexion has now been told by the banks that an appraisal suggesting the combined company would be solvent does not meet the conditions of a commitment letter on the deal.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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