Hexion Specialty Chemicals, owned by private equity firm Apollo Management, has launched a $10.4 billion, or $27.25/share, bid to acquire Huntsman, topping Basell’s previously announced $25.25/share agreement to acquire the company. Huntsman says that a committee of independent directors is evaluating the Hexion bid and “are engaged in discussions with
Hexion regarding their proposal.” Basell is entitled to a $200 million payment if Huntsman accepts a higher bid, according to Huntsman. Hexion has agreed to fund $100 million of this payment, according to Huntsman. Hexion has leading positions in epoxy, phenolic, and formaldehyde-based resins as well as coatings and inks. There is overlap in the epoxies business. Hexion says it has a leading 34% global market share in epoxy resins. Huntsman currently ranks third in epoxies globally, and Hexion could be required to divest all or part of Huntsman’s epoxy business to gain antitrust approvals, analysts say. Dow Chemical is the other leading global epoxy producer, and the top-three producers account for about 75% of global capacity for epoxy resins, according to SRI Consulting (Menlo Park, CA). Hexion’s proposal includes a $325 million reverse break-up fee payable by Hexion to Huntsman “in the event the transaction does not close due to the failure to obtain regulatory clearance or requisite financing,” Huntsman says. The Huntsman family and investment firm MatlinPatters
on together control a trust that owns 59% of Huntsman stock. MatlinPatterson owns about 55% of that trust, but the Huntsman family retains voting control of the trust, and, in effect, operating control of the company. Huntsman spurned offers from private equity buyers last year, including Apollo, that were in the low-$20/share range last year. Company founder and chairman Jon Huntsman told analysts at a Huntsman investor meeting earlier this year that the company was not for sale “unless I know I can get maximum dollar. I’m not going to give up what I’ve worked my entire life to build when someone comes in with an offer of $23-$24 /share.”
Hexion regarding their proposal.” Basell is entitled to a $200 million payment if Huntsman accepts a higher bid, according to Huntsman. Hexion has agreed to fund $100 million of this payment, according to Huntsman. Hexion has leading positions in epoxy, phenolic, and formaldehyde-based resins as well as coatings and inks. There is overlap in the epoxies business. Hexion says it has a leading 34% global market share in epoxy resins. Huntsman currently ranks third in epoxies globally, and Hexion could be required to divest all or part of Huntsman’s epoxy business to gain antitrust approvals, analysts say. Dow Chemical is the other leading global epoxy producer, and the top-three producers account for about 75% of global capacity for epoxy resins, according to SRI Consulting (Menlo Park, CA). Hexion’s proposal includes a $325 million reverse break-up fee payable by Hexion to Huntsman “in the event the transaction does not close due to the failure to obtain regulatory clearance or requisite financing,” Huntsman says. The Huntsman family and investment firm MatlinPatters
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