Huntsman Receives Merger Proposal from Hexion for $27.25 Per Share in Cash
THE WOODLANDS, Texas and SALT LAKE CITY, July 3 -- Huntsman Corporation (NYSE:HUN) announced today that it has received from Hexion Specialty Chemicals, Inc. ("Hexion"), an entity owned by an affiliate of Apollo Management, L.P., a proposal (the "Hexion Proposal") to acquire all of the outstanding common stock of Huntsman for $27.25 per share in cash.
The Hexion Proposal is subject to termination of Huntsman's previously announced merger agreement with Basell AF ("Basell") (the "Basell Agreement") and the execution of a definitive merger agreement with Hexion. The Hexion Proposal's terms include that Hexion will have up to 12 months, subject to a 90 day extension in the judgment of the Huntsman Board of Directors under certain circumstances, to close the transaction and that the cash price per share to be paid by Hexion will increase at the rate of 8% per annum (inclusive of any dividends paid) beginning nine months after a definitive merger agreement is executed. The required financing for the Hexion Proposal is fully committed. Furthermore, the proposal does not include a financing condition. The Hexion Proposal also includes a $325 million reverse break-up fee payable by Hexion to the Company in the event the transaction does not close due to the failure to obtain regulatory clearance or requisite financing. The Hexion Proposal provides for a $225 million termination fee payable by Huntsman in the event of certain terminations by Huntsman in connection with the exercise by the Board of Directors or the Transaction Committee thereof of its fiduciary duties.
As announced on June 26, 2007, Huntsman entered into the Basell Agreement, pursuant to which Basell agreed to acquire all of the outstanding common stock of Huntsman for $25.25 per share in cash. The Basell Agreement may be terminated under certain circumstances, including if the Company receives a superior proposal and provides advance notice to Basell. If the Basell Agreement is terminated under these circumstances, Basell will be entitled to a $200 million payment. Hexion has agreed to directly fund $100 million of this payment, subject to reimbursement by Huntsman if the transaction with Hexion were not consummated in certain circumstances.
The Huntsman Board of Directors, with the unanimous agreement of its Transaction Committee comprised solely of independent directors, has concluded that the Hexion Proposal could reasonably be expected to lead to a superior proposal, as defined in the Basell Agreement. The Transaction Committee is continuing to evaluate the terms of the Hexion Proposal and the Company and its advisors are engaged in discussions with Hexion regarding their proposal. The Transaction Committee, in determining whether or not to pursue the Hexion Proposal, will take into account the views of the principal shareholders of the Company. These principal shareholders are currently required to support the Basell Agreement under existing voting agreements with Basell, unless the Board of Directors or the Transaction Committee elects to terminate the Basell Agreement in favor of a superior proposal. Pending the culmination of these discussions with Hexion and the principal shareholders, neither Huntsman's Board of Directors nor the Transaction Committee has changed its recommendation regarding the proposed merger with Basell. Huntsman cannot give any assurance that the Hexion Proposal will result in a definitive agreement or a consummated transaction.
Source: Huntsman Corporation
Web site: http://www.huntsman.com/
