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June 27, 2008

1 Min Read
Hexion, Huntsman breakup gets ugly; Apollo sued

Following a suit by Hexion Specialty Chemicals and its private equity owner, Apollo Management LP (New York), which sought to exit a merger agreement between Huntsman Corp.’s (The Woodlands, TX) commodities units and the Columbus, OH based maker of thermoset resins, Huntsman announced its own suit against Apollo partners Leon Black and Joshua Harris. Filed in Conroe, TX for fraud and tortious interference in connection with inducing Huntsman to terminate its merger agreement with Basell, the suit seeks a jury trial to determine the defendants’ liability to Huntsman for actual damages exceeding $3 billion, plus exemplary damages.

After reaching terms with Basell last summer, Huntsman abandoned its Dutch suitor on the altar in favor of a $28/share offer from Apollo through Hexion, eventually splitting a $200 million termination fee with Hexion, which was imposed for backing out of the Basell deal. Shortly thereafter, Basell, which is owned by private equity business Access Industries, announced on July 17 that it would acquire Lyondell Chemical Co. (Houston, TX) for approximately $19 billion, including the assumption of debt (link). According to a report in The Wall Street Journal, Apollo commissioned a study of Huntsman’s business, which found the chemical giant to be worse off than advertised, making Apollo’s bid for the company, which called for zero equity from Apollo, difficult to muster financing for.—[email protected]

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