Hexion goes to court in bid to stop merger with Huntsman

By Lisa Kerner

Charlotte, N.C., July 8 - Hexion Chemicals, Inc. and Nimbus Merger Sub Inc., along with some other parties, filed a motion for leave to file an amended and supplemental complaint to their suit filed June 18 in the Court of Chancery of the State of Delaware.

In the complaint, Hexion asks the court to determine that it is not obligated to consummate the merger with Huntsman Corp. under their July 12, 2007 agreement if the combined company would be insolvent, according to a form 8-K filed with the Securities and Exchange Commission.

Hexion is seeking a cap of $325 million on its liability to Huntsman for failure of the merger to be consummated.

The court was asked to declare that since the execution of the merger agreement, Huntsman has suffered a company material adverse effect as defined in the agreement, leaving Hexion with no obligation to make any payment to Huntsman.

Hexion also asked that the extension of the merger agreement by the Huntsman board of directors to Oct. 2 from July 4 be declared invalid.

It was previously reported that Hexion does not believe that the Huntsman board could have "determined in good faith that there exists an objectively reasonable probability that the merger can be completed within the next 90 days."

Hexion said it intends to comply with its obligations under the merger agreement with respect to the financing and sought Huntsman's approval to pursue alternative financing under the agreement with the assistance of Gleacher Partners.

Huntsman was asked to execute a consent by noon ET on July 9, a July 8 letter to the company said. The letter was included in a form 8-K filing with the SEC.

On July 12, 2007, Hexion agreed to acquire Huntsman in an all-cash transaction valued at approximately $10.6 billion, including 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.

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