Hexion says Huntsman's announced results match its own analysis, calls for more data

By Lisa Kerner

Charlotte, N.C., July 17 - Hexion Specialty Chemicals, Inc. said Huntsman Corp.'s preliminary results for the second quarter of 2008, which represent at least a 15% decline from the results for the second quarter of 2007, "mirror exactly the numbers provided to Duff & Phelps for its solvency analysis." In addition, Huntsman's second quarter 2008 debt is identical to the number Duff & Phelps assumed in its analysis, said Hexion in a July 17 letter to Huntsman.

"Had Huntsman consented to the unsealing of our Delaware complaint, Huntsman shareholders would know these facts," Hexion said in the letter, which was included in form 8-K filed with the Securities and Exchange Commission.

Hexion reiterated its request that Huntsman agree to unseal the pleadings in the Delaware litigation, including the contents of the Duff & Phelps report.

Huntsman was also asked again to provide Hexion with updated cash flow and net debt projections as required under the companies' merger agreement.

On July 8, it was reported that Hexion asked a Delaware court to determine that it is not obligated to consummate the merger with Huntsman under their July 12, 2007 agreement if the combined company would be insolvent.

Hexion is seeking a cap of $325 million on its liability to Huntsman for failure of the merger to be consummated, a prior SEC filing noted.

The court also was asked to declare that since the execution of the merger agreement, Huntsman has suffered a company material adverse effect as defined in the agreement, leaving Hexion with no obligation to make any payment to Huntsman.

According to Hexion, Huntsman claims Hexion's allegations in its Delaware complaint are "false and misleading."

A trial is set to begin on Sept. 8, it was noted previously.

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.

Based in Columbus, Ohio, Hexion makes thermoset resins. Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.

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