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Huntsman extends termination date in deal with Hexion
By Lisa Kerner
Charlotte, N.C., July 7 - Huntsman Corp. formally notified Hexion Specialty Chemicals, Inc. that it was extending the termination date of their July 12, 2007 merger agreement by 90 days to 4 p.m. ET on Oct. 2, according to a form 8-K filed with the Securities and Exchange Commission.
In its July 7 response, Hexion said it does not believe the Huntsman board could have "determined in good faith that there exists an objectively reasonable probability that the merger can be completed within the next 90 days."
Hexion also reiterated that the materials it provided to Huntsman "demonstrate that the total amount of financing available under the commitment letter is insufficient to close the transaction, and that the gap is extraordinarily large."
In addition, Hexion asked Huntsman to provide its calculation of sources and uses of funds to show that the financing under the commitment letter is sufficient to close the transaction and that the combined company will be solvent at closing.
Huntsman failure to provide requested current cash flow and net debt estimates to Hexion is in "clear breach of its contractual obligations," Hexion noted in its form 8-K filing.
On July 12, 2007, Hexion agreed to acquire Huntsman in an all-cash transaction valued at approximately $10.6 billion, including the assumption of debt. Huntsman shareholders approved the deal in October 2007.
Hexion exercised its right under the merger agreement to extend the termination date by 90 days to July 4 from April 5, a prior news release noted.
Because the merger was not completed by April 5, the $28-per-share offer price is increased at the rate of 8% per year.
Based in Columbus, Ohio, Hexion makes thermoset resins. Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.
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