Enter multiple symbols separated by commas

Huntsman Gets Higher Bid From Equity Firm Apollo

U.S. private equity firm Apollo Management unveiled a $6 billion bid proposal for Huntsman on Wednesday, 8% higher than a deal accepted by the U.S. chemical company last week.

Huntsman , whose products are used in paints, footwear and cleaning products, said the new proposal was from Apollo's Hexion Specialty Chemicals and was worth $27.25 per share.

On June 26, privately owned Dutch chemicals maker Basell said it had agreed to buy Huntsman for $5.6 billion excluding debt, or $25.25 per share, in a bid to strengthen its position as a global chemicals group.

Huntsman shares, at $18.90 before news of the Basell deal, closed at $24.40 on Tuesday. U.S. markets are closed for a holiday on Wednesday.

Basell, which would not comment on Apollo's offer, is entitled to a $200 million break-up fee from Huntsman if it walks away from the deal, Huntsman said, adding Hexion had offered to fund $100 million of this payment and has funding in place for its proposed acquisition.

HSBC analyst Hassan Ahmed said at the time of the Basell deal that it represented great value for Huntsman shareholders as it valued the firm at about 8.6 times earnings before interest, taxes, depreciation and amortization (EBITDA).

Basell, owned by privately-held U.S. industrial group Access Industries, is a leading producer of polypropylene used in textiles, reusable containers and laboratory equipment. Its bid for Huntsman is worth $9.6 billion including debt.

Access itself is run by Len Blavatnik, a U.S. businessman of Russian origin estimated by Forbes to be the world's 40th richest person in 2006 with a $7.0 billion fortune.

Entities controlled by private-equity fund MatlinPatterson and the Huntsman family, who collectively own 57% of Huntsman's common stock, have agreed to the deal with Basell.

The cost of insuring Basell's debt fell on Wednesday, with five-year CDS on Basell down 25 basis points to 385 b.p.

Ratings agencies Moody's Investors Service, Standard & Poor's and Fitch Ratings have said they may cut Basell's ratings if its debt-funded acquisition of Huntsman goes through.

Hexion's proposal includes a clause in which it will pay Huntsman $325 million if the transaction does not close due to the failure to obtain regulatory clearance or requisite financing.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Mark Cuban and Donald Trump

    Donald Trump appears to have Mark Cuban's vote, at least in terms of how the billionaire real estate mogul is conducting his political campaign.

  • Ferrari 488 Spider

    Ferrari's new 488 Spider will have a V-8 turbo engine and a retractable hard-top roof that lowers in just 14 seconds.

  • Members of the New Horizons science team react to seeing the spacecraft's last and sharpest image of Pluto before closest approach later in the day at the Johns Hopkins University Applied Physics Laboratory (APL) in Laurel, Maryland July 14, 2015.More than nine years after its launch, a U.S. spacecraft sailed past Pluto on Tuesday, capping a 3 billion mile (4.88 billion km) journey to the solar system's farthest reaches, NASA said.

    The New Horizons Pluto flyby mission set records for NASA's social media and web metrics——but why do we care so much?

U.S. Video