Moody's may cut Hercules

Moody's Investors Service said it placed the Ba1 corporate family rating and other debt ratings of Hercules, Inc. under review for possible downgrade.

The reviews are prompted by the announcement that the boards of Ashland, Inc. (Ba1) and Hercules approved a definitive merger agreement under which Ashland would acquire all of the outstanding shares of Hercules in the form of $18.60 per share in cash and 0.093 of a share of Ashland common stock for each share of Hercules stock, the agency said.

The total transaction value would be $3.3 billion, or $23.01 per Hercules share based on Ashland's July 10 closing stock price and including $0.7 billion of net assumed debt, Moody's noted.

While Ashland has almost no debt currently, the agency said that the acquisition will result in the merged companies taking on a material amount of debt that will put the current Ashland Ba1 corporate family rating under negative pressure and would likely result in a one notch downgrade in the corporate family rating to Ba2, provided there is no change in the purchase price and other deal and financing terms, as announced and assuming no material changes to the outlook for the merged companies raw material costs and end markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.