Hexion bid for Huntsman backed by debt commitments from Credit Suisse, Deutsche

By Sara Rosenberg

New York, July 6 - Hexion Specialty Chemicals Inc.'s buyout bid for Huntsman Corp. is being backed by debt commitments from Credit Suisse and Deutsche Bank, according to a news release.

Under the proposal, Hexion would buy Huntsman for $10.4 billion, including refinanced debt, or $27.25 per share in cash.

In addition, the Hexion proposal includes that the cash price per share will increase at the rate of 8% per annum, inclusive of any dividends paid, beginning nine months after a definitive merger agreement is executed.

As announced on June 26, Huntsman has already entered into a buyout agreement with Basell, under which Basell will acquire all of the outstanding common stock of Huntsman for $25.25 per share in cash. The transaction is valued at $9.6 billion, including the assumption of debt.

The Basell deal is backed by a debt financing commitment from Citigroup.

On Friday, news emerged that the transaction committee, comprised of Huntsman independent directors, and the board of directors of Huntsman have determined that Hexion's proposal constitutes a superior proposal under the terms of the merger agreement between Huntsman and Basell.

Huntsman has advised Hexion that it has provided notice to Basell, which after the expiration of three business days would entitle, but not require, Huntsman's board of directors or a committee to make an adverse recommendation change.

In determining whether to make an adverse recommendation change, Huntsman will take into account any changes to the financial terms of the Basell agreement that may be proposed by Basell in response to the notice.

Huntsman has advised Hexion that its decision is not and should not be construed as a change by its board or its transaction committee in its recommendation of the Basell agreement, the news release said.

Until Huntsman's board or transaction committee takes further action pursuant to the terms of the Basell agreement, it continues to recommend the transaction with Basell to its shareholders.

Huntsman is a Salt Lake City-based manufacturer and marketer of commodity and differentiated chemicals. Hexion is a Columbus, Ohio-based thermoset resins company. Basell is a Netherlands-based producer of polypropylene and polyethylene.

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