Huntsman to sue buyer Apollo Management and partners for fraud

27-Jun-08

Huntsman Corporation is to sue Apollo Management and its two partners for fraud, seeking a jury trial for damages exceeding US$3 bln, plus additional punitive damages. This decision has been taken by Huntsman after the private equity group backed out of a deal to buy Huntsman for US$6.5 bln. Last week, Apollo's Hexion unit is reported to have stated that it no longer believes it can buy Huntsman, because of the company´s financial deterioration. Huntsman alleges that Apollo falsely represented its commitment to the deal to get it to terminate a previous buyout agreement with Dutch manufacturer Basell. Apollo outbid Basell, a unit of New York-based Access Industries Holdings LLC that had agreed to pay $25.25 a share for Huntsman, with a $28-a-share offer. Huntsman had decided lat year to break a takeover agreement with Basell Holdings NV to accept a higher offer from Hexion Specialty Chemicals Inc., which is controlled by Apollo. Huntsman plans to contest the allegations made about its financial performance. The Apollo-Huntsman deal is one of the biggest uncompleted transactions announced prior to last year's credit-market collapse.