A bidding war appears to be shaping
up over the acquisition of Salt Lake City-based differentiated chemicals manufacturer Huntsman
Corp. (See “Huntsman Takes Over Arabian Polyol Joint Venture, Signs Acquisition Agreement With
Basell,” www.TextileWorld.com Breaking News, June 26, 2007). One week after Huntsman signed an
acquisition agreement with the Netherlands-based Basell — a manufacturer of polypropylene and
advanced polyolefin products — for $25.25 per share or $9.6 billion including the assumption of
debt, Hexion Specialty Chemicals Inc. — a Columbus, Ohio-based supplier of thermoset resins —
raised the ante, offering $27.25 per share or $10.4 billion including debt. Yesterday, Hexion
increased its offer to $28 per share or $10.5 billion.
Last Friday, Huntsman’s Transaction Committee and Board of Directors deemed Hexion’s initial
offer superior to the Basell offer. Huntsman has notified Basell, held by New York City-based
Access Industries, of the committee’s finding, but Huntsman’s Board of Directors continues to
recommend the Basell offer to its stockholders, and it must wait until three business days have
passed before taking definitive action to change its recommendation. In addition, Basell may
counter the Hexion offer during that period. As of Textile World’s press time, no further offer has
The terms of the agreement with Basell include a $200 million break-up fee to be paid to
Basell if another offer is accepted. Hexion, which is owned by an affiliate of Purchase, N.Y.-based
Apollo Management LP, has agreed to pay $100 million of that fee as part of its offer.
Hexion’s offer includes a $325 million reverse break-up fee payable by Hexion to Huntsman
should Hexion fail to obtain regulatory approval or financing for the deal, and a $225 million
break-up fee payable by Huntsman to Hexion related to certain termination actions by Huntsman’s
Transaction Committee or Board of Directors.
July 10, 2007