TimelineHexion, Huntsman merger, lawsuit

20 June 2008 08:36  [Source: ICIS news]

HOUSTON (ICIS news)--The following is a timeline listing the main events that led up to the lawsuit filed by Hexion Specialty Chemicals against Huntsman.

May 2007: Huntsman puts itself up for sale. It contacts Hexion Specialty Chemicals and Access Industries, the owner of Basell.

June 2007: Huntsman portrays itself as the 'New Huntsman," a company that makes materials which command higher margins. Huntsman forecasts that, in 2007, it will reach $1.027bn (€668m) in earnings before interest, taxes, depreciation and amortisation (EBITDA). That's up from $960m in 2006. It should reach $1.289bn in 2008 and $1.661bn in 2011. At the same time, Huntsman projected declines of its net debt.

25 June 2007: Huntsman signs a merger agreement with Basell at $9.6bn ($25.25/share). Later that night, Hexion offered a bid of $27/share.

29 June 2007: Hexion raises its bid to $27.25/share

8 July 2007: Hexion raises its bid to $28/share. Huntsman recognised in a proxy statement that Hexion's increased bids reflected the additional risk inherent in the deal.

Due to regulatory approval, a Hexion/Huntsman deal would take longer to close. That delay would increase the chances that financial markets would deteriorate, preventing Hexion from financing the deal. Moreover, an event could occur - called a material adverse effect - which would give Hexion a reason to back out the merger without paying any termination fees.

12 July 2007: Hexion and Huntsman enter into a merger agreement.

17 July 2007: Basell acquires Lyondell instead for $19bn.

20 December 2007: Lyondell and Basell complete their merger. The two companies become LyondellBasell.

9 May 2008: Huntsman reports 2008 first-quarter operating profit of $86.1m, down 37%.

18 June 2008: Financial advisors Duff & Phelps tell Hexion's board of directors that the merged company would not be solvent.

Hexion sues Huntsman in Delaware state court, saying it met the conditions to abandon the merger without paying a $325m termination fee.

Huntsman said it would challenge the suit and pursue the merger.

($1 = €0.65)

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By: Al Greenwood
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