Huntsman wins temporary injunction against banks in Hexion merger

By Lisa Kerner

Charlotte, N.C., Oct. 13 - Huntsman Corp. said it scored another major victory in its bid to complete the pending merger with Hexion Specialty Chemicals, Inc. following a ruling handed down today in the Montgomery County Texas District Court.

District judge Fred Edwards once again determined that it was appropriate for him to enjoin the banks that agreed to finance the merger from filing any lawsuit seeking to declare that the combined Hexion/Huntsman entity would be insolvent, or that the combined entity would not be able to pay its debts when due, a Huntsman news release said.

Huntsman had sued affiliates of Credit Suisse and Deutsche Bank.

Judge Edwards replaced a temporary restraining order, set to expire on Oct. 8, with a temporary injunction that will not expire prior to Nov. 1, unless the merger closes before then, the release said.

"We continue to press for consummation of the merger and, in light of today's ruling, we hope the banks will now move forward constructively to live up to their commitment to fund Hexion's acquisition of Huntsman," Huntsman president and chief executive officer Peter R. Huntsman said.

Huntsman's claims against the banks were consolidated by Judge Edwards with the company's previously filed claims against Apollo Management, LP, Leon Black and Joshua Harris. A jury trial is set to begin on Feb. 9, 2009. Huntsman is seeking more than $3 billion in actual damages, plus exemplary damages, attorneys' fees and interest, according to the release.

On Friday, Hexion announced that affiliates of Apollo agreed to make a capital contribution of $540 million to help fund the pending merger with Huntsman.

Hexion said that the financing helps address issues raised in the decision last week by the Delaware Chancery Court. The court ordered Hexion to perform its covenants under the companies' merger agreement, Huntsman said previously.

The Federal Trade Commission granted its approval of the proposed merger and accepted a consent order that requires Hexion to divest part of its specialty epoxy resin production and development capabilities to Spolek Pro Chemickou a Hutni Výrobu, Akciová Spolecnost within 10 days of Hexion's acquisition of Huntsman.

The European Commission also approved the sale to Spolek, which was a condition of its merger approval, an earlier Hexion news release said.

On July 12, 2007, Hexion agreed to acquire Huntsman in an all-cash transaction that included the assumption of debt. Huntsman shareholders approved the deal in October 2007.

Based in Columbus, Ohio, Hexion makes thermoset resins. Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.

© 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.