UpdateHuntsman's suit 'baseless' - US Hexion

23 June 2008 17:33  [Source: ICIS news]

HOUSTON (ICIS news)--US producer Hexion Specialty Chemicals said on Monday that Huntsman filed a "baseless" lawsuit in an attempt to enforce a $10.6bn (€6.8bn ) merger between the two companies.

Huntsman sued Apollo, Hexion's parent firm, in Texas state court. Huntsman also sued Leon Black and Joshua Harris, two of Apollo's corporate parent.

Apollo and Huntsman agreed to a merger last year, following a bidding war with Basell.

In its suit, Huntsman alleges that Apollo made its offer as part of a fraudulent strategy to eliminate a Basell as a competitor.

In making its offer, Apollo assured Huntsman that it was committed to closing the merger agreement, the company alleges in the suit. In fact, Apollo intended to renegotiate the merger at a lower price, Huntsman alleges.

An Apollo spokesman referred questions to Hexion.

In a statement, Hexion's said, “It is unfortunate that Huntsman has chosen to file a baseless lawsuit against Apollo and to personally sue two of its principals."

In fact, Hexion said the Huntsman suit violated the merger agreement, which required that all litigation be filed in Delaware state court, Hexion said.

Moreover, Huntsman did not dispute Hexion's justification for abandoning the agreement - that the merger would create an insolvent company, the statement said.

"We believe Huntsman's lawsuit is wholly without merit," Hexion said.

($1 = €0.64)

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By: Al Greenwood
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