Huntsman Terminates Merger Agreement and Settles With Hexion and Apollo for $1 Billion
December 14 2008 - 9:33PM
PR Newswire (US)
Huntsman continues multi-billion dollar Texas lawsuit against
Credit Suisse and Deutsche Bank THE WOODLANDS, Texas, Dec. 14
/PRNewswire-FirstCall/ -- Huntsman Corporation (NYSE:HUN) today
announced it has terminated its Merger Agreement with Hexion
Specialty Chemicals, Inc. ("Hexion"). In addition, Huntsman
announced that it reached an agreement with Hexion, Apollo
Management, L.P. ("Apollo") and certain of its affiliates to settle
Huntsman's claims against Hexion, Apollo and its affiliates arising
in connection with Huntsman's Merger Agreement with Hexion.
Payments to be made to Huntsman under the Settlement Agreement
total $1 billion. In addition to the $325 million break-up fee to
be paid as provided in the Merger Agreement and which Hexion
expects will be funded by Credit Suisse and Deutsche Bank (the
"Banks") under an existing commitment, certain affiliates of Apollo
will make cash payments to Huntsman under the Settlement Agreement
totalling $425 million. Certain affiliates of Apollo also will pay
Huntsman an additional $250 million in exchange for 10 year
convertible notes issued by Huntsman in that principal amount,
which may be repaid at maturity in cash or common stock at
Huntsman's election. At least $500 million of the payments are to
be paid to Huntsman on or before December 31, 2008, and any
remaining payments that have not been made by that date must be
made on or before March 31, 2009. The Settlement Agreement also
resolves Huntsman's pending claims against Apollo and its
affiliates relating to Huntsman's prior merger agreement with
Basell AF. In announcing the settlement, Huntsman's President and
CEO Peter R. Huntsman stated, "We are pleased to have reached this
agreement with Hexion and Apollo. Receipt of these proceeds will
enhance the strength of Huntsman's balance sheet and better
position our company to prosper during the current turbulence in
the global economy. Additionally, our associates, customers and
suppliers can now put the uncertainty concerning the outcome of the
merger with Hexion behind them." Leon Black, Chairman of Apollo
Global Management, LLC, added, "We are happy to be resolving this
situation in the best interest of our investors. It puts to an end
the six month disagreement and distraction between our companies.
As the majority stakeholder in Hexion and now an investor in
Huntsman, we look forward to both companies traversing this
economic cycle and prospering." The settlement with Hexion, Apollo
and its affiliates does not resolve the claims asserted by Huntsman
against the Banks in its ongoing litigation against the Banks in
Montgomery County, Texas. Huntsman's suit against the Banks
includes claims that the banks conspired with Apollo and tortiously
interfered with Huntsman's prior merger agreement with Basell, as
well as with the later Merger Agreement with Hexion. A jury trial
on those claims currently is set to begin on May 11, 2009. As part
of the Settlement Agreement, Apollo and its principals have agreed
to fully cooperate in connection with Huntsman's litigation against
the Banks. Jon M. Huntsman, Founder and Executive Chairman of
Huntsman Corporation, commented, "This is a significant settlement
for our Company and its shareholders, but we must continue to
pursue our multi-billion dollar Texas case against Credit Suisse
and Deutsche Bank for the harm they have caused. We remain focused
on preparing for our May jury trial against the Banks." About
Huntsman: Huntsman is a global manufacturer and marketer of
differentiated chemicals. Its operating companies manufacture
products for a variety of global industries, including chemicals,
plastics, automotive, aviation, textiles, footwear, paints and
coatings, construction, technology, agriculture, health care,
detergent, personal care, furniture, appliances and packaging.
Originally known for pioneering innovations in packaging and,
later, for rapid and integrated growth in petrochemicals, Huntsman
today has 13,000 employees and operates from multiple locations
worldwide. The Company had 2007 revenues of approximately $10
billion. For more information about Huntsman, please visit the
company's website at http://www.huntsman.com/. Forward-Looking
Statements: Statements in this release that are not historical are
forward-looking statements. These statements are based on
management's current beliefs and expectations. The forward-looking
statements in this release are subject to uncertainty and changes
in circumstances and involve risks and uncertainties that may
affect the company's operations, markets, products, services,
prices and other factors as discussed in the Huntsman companies'
filings with the U.S. Securities and Exchange Commission.
Significant risks and uncertainties may relate to, but are not
limited to, financial, economic, competitive, environmental,
political, legal, regulatory and technological factors. In
addition, the completion of any transactions described in this
release is subject to a number of uncertainties and closing will be
subject to approvals and other customary conditions. Accordingly,
there can be no assurance that such transactions will be completed
or that the company's expectations will be realized. The company
assumes no obligation to provide revisions to any forward-looking
statements should circumstances change, except as otherwise
required by applicable laws. DATASOURCE: Huntsman Corporation
CONTACT: Media, Russ Stolle, +1-281-719-6624, or Investor
Relations, Kurt Ogden, +1-801-584-5959, both of Huntsman
Corporation Web site: http://www.huntsman.com/
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