02 July 2008 15:29 [Source: ICIS news]
HOUSTON (ICIS news)--US producer Hexion Specialty Chemicals repeated on Wednesday its stance that a proposed $10.6bn (€6.7bn) merger with Huntsman is doomed, and any extension of the merger's deadline would violate the terms of the agreement.
Huntsman had earlier said it would deliver a notice of a 90-day extension of the merger, pushing the deadline to 2 October.
Hexion countered that, under the merger agreement, Huntsman could extend the deadline only if its board believed that the deal could be completed within the 90-day time frame.
"We do not understand how Huntsman's board of directors could in good faith make that determination," according to a statement by Hexion CEO Craig Morrison.
"There is no factual basis to conclude that the combined company would be solvent."
The proposed merger is mired in litigation, with each side suing the other.
On 18 June, Hexion filed a lawsuit in a Delaware court seeking to break its agreement. In its suit, Hexion alleges that the merger would create an insolvent company, largely based on the opinion of financial advisers Duff & Phelps.
Huntsman counter-sued Hexion's owners Apollo in a Texas district court on 23 June, alleging that Apollo negotiated the deal in bad faith, and it owes Huntsman at least $3.1bn in damages.
Morrison said that Huntsman's claims lack merit.
Huntsman accepted an offer from Hexion to be acquired for $28/share in July last year.
Huntsman shares were trading at $11.10 on the New York Stock Exchange, down 0.34% on the previous close.
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