NPRA '08: Hexion's Huntsman buy on track - video
31 March 2008 23:45 [Source: ICIS news]
By Joe Chang, with video interview by Simon Robinson
SAN ANTONIO, Texas (ICIS news)--Hexion Specialty Chemicals' $10.6bn (€6.7bn) acquisition of Huntsman is "on a very good track," said the latter company's chairman and CEO Peter Huntsman on Monday.
In January, Hexion, which is owned by private equity firm Apollo Management, extended its period to close the deal by 90 days from April 5, to July 4. The merger is not expected to close before 3 May, according to Hexion.
"We knew this would be a complicated process, so we had this extension period in the merger agreement," said Huntsman.
The agreement stipulates that the price of the acquisition increases by 8% on an annualised basis, starting from the April extension period.
"There is the ticking fee that provides incentive for Apollo to close the deal quickly, and we also have firm financing contract with Deutsche Bank and Credit Suisse - banks we've had relationships with for years."
Huntsman pointed out that unlike private equity deals that have recently fallen apart through the credit crisis, "the Hexion/Huntsman deal is not a pure financial transaction".
"The merger will form the world's largest specialty chemical company with higher-than GDP growth rates and double-digit margins," Huntsman said. "The deal and financing makes sense and we expect we will complete the deal in short order."
Between 14-17 March, Peter Huntsman acquired 20,000 shares of Huntsman stock at prices between $23.50 and $23.80/share for a total of $473,000.
Hexion agreed to buy Huntsman for $28/share back in July 2007.
The NPRA meeting started on Sunday and runs through Tuesday.
($1 = €0.63)
"We are happy with the work being done with the FTC [US Federal Trade Commission] and are in the advanced stages of pushing this through," Huntsman told ICIS news on the sidelines of the 33rd National Petrochemical & Refiners Association (NPRA) meeting.
In January, Hexion, which is owned by private equity firm Apollo Management, extended its period to close the deal by 90 days from April 5, to July 4. The merger is not expected to close before 3 May, according to Hexion.
"We knew this would be a complicated process, so we had this extension period in the merger agreement," said Huntsman.
The agreement stipulates that the price of the acquisition increases by 8% on an annualised basis, starting from the April extension period.
"There is the ticking fee that provides incentive for Apollo to close the deal quickly, and we also have firm financing contract with Deutsche Bank and Credit Suisse - banks we've had relationships with for years."
Huntsman pointed out that unlike private equity deals that have recently fallen apart through the credit crisis, "the Hexion/Huntsman deal is not a pure financial transaction".
"The merger will form the world's largest specialty chemical company with higher-than GDP growth rates and double-digit margins," Huntsman said. "The deal and financing makes sense and we expect we will complete the deal in short order."
Between 14-17 March, Peter Huntsman acquired 20,000 shares of Huntsman stock at prices between $23.50 and $23.80/share for a total of $473,000.
Hexion agreed to buy Huntsman for $28/share back in July 2007.
The NPRA meeting started on Sunday and runs through Tuesday.
($1 = €0.63)
By: Joseph Chang
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