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There are new details on the settlement reached between Dow Chemical and Rohm & Haas on Monday.
The settlement has Rohm shareholders receiving $79 a share, including a ticker fee, which in mergers and acquisitions is an agreement to pay interest on the cash portion of the deal from the time a bid is accepted until the final closing.
The Haas Family Trust will now receive $1.5 billion in preferred stock with a 7 percent coupon. The Haas Family Trust also will also receive $500 million in mandatorily convertible stock. Paulson & Company receives $1 billion of preferred stock with a 7 percent coupon.
The original purchase price that was about to be litigated in Delaware Chancery Court this week stood at $78 a share. Dow now also has the option to issue $500 million in additional equity at the closing of the deal.
The Dow Chemical and Rohm & Haas deal will close no later than April 1.
Shares of Dow Chemical [DOW
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] were halted Monday afternoon.
Rohm sued Dow in January after Dow refused to go through with the takeover, claiming the deal under its original terms would jeopardize its future.
Dow said late Sunday that settlement talks were going "quite well," but it also said it would not settle at the original price of $78 a share in cash for Rohm.
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Dow Chemical Plant |
Last July, Dow agreed to buy Rohm and Haas for $78 a share to broaden its product offerings in higher-margin markets such as paints, coatings and electronic materials. Because Rohm was highly sought after, Dow agreed to pay what was then a more then 70 percent premium for the company.
But Dow balked at closing after a Dow joint venture with Kuwait fell apart. Dow had intended to use proceeds from that $17.4 billion plastics joint venture to help fund the Rohm deal.
The Georgetown, Del., courtroom filled up beyond capacity Monday morning, with teams of lawyers as well as Rohm Chief Operating Officer Pierre Brondeau in attendance.
—Reuters contributed to this report.
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