Huntsman Corp. and Rexene Corp. continue to scrabble like a willing groom and an unwilling bride, while an arbitrageur — and Rexene's shareholders and customers — are waiting to see if the wedding is on. The arbitrageur, Wall Street investor Guy P. Wyser-Pratte, may be holding the shotgun: a 10.07 percent share in Rexene.
Wyser-Pratte's interests in Rexene permitted it to nominate four new directors to the company's board. Previously, Wyser-Pratte proposed downsizing the board to give its new directors a majority. Wyser-Pratte's interest in Rexene includes holdings by Spear, Leeds & Kellogg, a Wall Street securities trading firm.
The election of directors and Wyser-Pratte's recommendations for changes in the company's charter would be addressed at a special shareholders meeting it has requested, but which has not been scheduled.
Financial wrangling over Huntsman's offer to buy Rexene took a new turn in late October, when Huntsman offered to buy Rexene at $16 per share in a cash offer worth about $493 million.
Rexene's board of directors rejected that offer. It was Hunts-man's third — and highest — offer for Rexene since early July.
The offer was kept between the companies until Rexene made it public in documents filed with the U.S. Securities and Exchange Commission Nov. 27. In response, Huntsman issued a news release Dec. 4 accompanied by a three-page letter Jon Huntsman wrote to Andrew J. Smith on Nov. 12.
Huntsman is chairman and chief executive officer of the Salt Lake City chemical company that bears his name. Smith is Rexene's chairman and CEO.
Dallas-based Rexene also issued a statement Dec. 4, and included a two-page letter dated Nov. 15 from Smith to Huntsman.
The executives' letters contained their differing views of negotiations that started Oct. 29 and ended Nov. 5 with Rexene board's rejection of Huntsman's latest offer.
``Let me state that the Rexene board is not opposed to an offer to sell the company that is in the best interest of our stockholders,'' Smith's letter to Huntsman said.
Smith added, however, that Rexene's board also did not approve acceptance of Huntsman's $16-per-share offer, but requested further detailed information, and later, on Nov. 5, offered an alternative: That Huntsman pursue a tender offer for Rexene.
When Huntsman declined to pursue that alternative, negotiations ceased, according to Rexene.
Huntsman said: ``We believe Rexene does not have a sincere and serious intent to sell the company and maximize shareholder value.''
Eric Longmire, director of research for Wyser-Pratte, said Dec. 5 he agrees with Huntsman's views.
Longmire dismissed Smith's letter, saying of Rexene: ``They seem like they are going through the motions of considering Huntsman's offers, while they are throwing up legal barriers to any offer at all.''
Huntsman spokesman Don Olsen said Dec. 5 that Huntsman's interest in Rexene is unabated.
``We made our first offer last July, and the things about Rexene that made it attractive then — the synergies in the companies and in the products — still exist.
``We think $16 per share is very, very fair,'' Olsen said. Shares in Rexene closed at $13.625 Dec. 4 in trading on the New York Stock Exchange.
``Our interest has not ended, but we believe we are up against a recalcitrant board,'' Olsen said.
Neil Devroy, Rexene spokesman, said Rexene's management and board believe they are being reasonable in requesting more information from Huntsman, while looking out for shareholders' interests in seeking a tender offer rather than a cash offer.