Ohio firm outbids Basell for Huntsman

Columbus, Ohio-based Hexion Specialty Chemicals, Inc. has entered a bid for Utah-based Huntsman Corporation, offering US$2 more per share than a previous offer by Dutch petrochemical giant Basell.

Huntsman recently announced that it had signed an agreement for Basell to acquire all of the company’s outstanding common stock for US$25.25 per share in cash. The transaction was valued at approximately US$9.6 billion, including the assumption of debt.

Hexion, an entity owned by an affiliate of private equity firm Apollo Management, L.P., has offered US$27.25 per share of Huntsman’s outstanding common stock. The new proposal is subject to the termination of Huntsman’s previous merger agreement with Basell, and the execution of a merger agreement with Hexion.

The Basell deal can be terminated if the company receives a “superior proposal” and provides advanced notice. Basell would be entitled to a US$200 million payment if the Basell agreement is terminated under these circumstances, and Hexion has agreed to fund half that amount.

Huntsman also noted that the company’s board of directors “has concluded that the Hexion proposal could reasonably be expected to lead to a superior proposal.” A Transaction Committee consisting of independent directors is determining whether to pursue the Hexion proposal, but the board of directors and Transaction Committee have not changed their recommendation regarding the Basell merger.

According to Huntsman’s official website, the company has a polyurethane blending and sales and admin office in Mississauga, Ont.; an expanded polystyrene manufacturing facility in Mansonville, Que.; and a titanium dioxide technical support centre in Mont. St. Hilaire, Que.