Hexion Specialty Chemicals Inc. has trumped Basell Holding BV's bid to buy Huntsman Corp.
Hexion's $27.25-per-share bid, plus assumed debt, adds up to $10.4 billion, almost $1 billion more than Basell's June 26 offer.
Columbus, Ohio-based Hexion, which is the world's largest maker of thermoset plastics, confirmed the offer July 4. Huntsman, a producer of polyurethanes and other specialty materials based in Salt Lake City, responded that same day with a news release in which the company's board ``concluded that the Hexion proposal could reasonably be expected to lead to a superior proposal.''
Both Hexion and Basell - a Hoofddorp, Netherlands, firm that ranks as the world's largest polypropylene maker - are owned by New York-based private equity firms. Hexion is controlled by Apollo Management LP, while Basell is owned by Access Industries Inc.
Officials with both Hexion and Basell declined to comment. But Basell spokesman Stan Neve said his firm has not withdrawn its original $25.25 per-share offer to buy Huntsman. Huntsman officials could not be reached for comment.
Hexion's bid has not yet been formalized. If Huntsman accepts a formal bid from Hexion, Basell would receive a $200 million breakup fee. Hexion has agreed to pay half of that amount. An industry source said the only possible roadblock to the deal is the dominant role such a combination could have in the epoxy resin market. Regulators might object on the grounds that it would create competitive imbalance in the segment, the source said.
In 2006, Huntsman posted sales of $10.6 billion, flat with its 2005 total. The company's 2006 pretax profit of $1.2 billion was down about 14 percent from the prior year. Entrepreneur Jon Huntsman founded the company as a private venture and after more than 30 years, it went public in 2005. For several years, the company ranked as one of North America's largest polystyrene makers.
Hexion was formed in 2005 from a merger of Borden, Bakelite AG, Resolution Performance Products and Resolution Specialty Materials. The firm lost $109 million in 2006 after losing $87 million in 2005.