Despite seeking to quit a US$6.5 bln buyout of chemical maker Huntsman Corp., Hexion Specialty Chemicals Inc., has rejected another bid by a Huntsman shareholder group to add US$416 mln in cash to finance the buyout. The proposal by Jon Huntsman and few other Huntsman shareholders was received by Hexion a few hours before the Delaware trial began. The amount offered is not sufficient to fund the gap or make the combined company solvent.
Hexion is suing Huntsman in Delaware to free itself of the deal and a US$325 mln breakup fee. Last month it rejected a US$500 mln financing proposal from the same shareholder group, calling it inadequate.
In July 2007, Huntsman accepted a US$28 per share buyout offer from Columbus, Ohio-based Hexion, an affiliate of Apollo Management LP, over a rival offer. But in June, Hexion announced that Huntsman´s deteriorating finances no longer made the deal viable and it would back out. Huntsman responded with a US$3 billion lawsuit claiming Apollo never planned to go through with the deal and was instead trying to squeeze a rival bidder, Dutch manufacturer Basell AF.