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Huntsman obtains solvency opinion in pending merger with Hexion Specialty Chemicals
By Lisa Kerner
Charlotte, N.C., Oct. 24 - Huntsman Corp. said it received a written opinion from American Appraisal Inc. that the company to be formed from the pending merger of Hexion Specialty Chemicals, Inc. and Huntsman would be solvent.
To satisfy a condition in Hexion's agreement with affiliates of Credit Suisse and Deutsche Bank, Huntsman plans to request an updated solvency opinion from American Appraisal for delivery at the merger's close, a Huntsman news release said.
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.
In June, Hexion said the capital structure agreed to for the combined company is no longer viable and that completing the merger would render the combined company insolvent. Hexion blamed Huntsman's increased net debt and its lower-than-expected earnings and declined to extend the merger agreement.
On Sept. 30, Huntsman announced that the Delaware Court of Chancery decided in favor of Huntsman and ordered Hexion Specialty Chemicals to perform its covenants under the companies' merger agreement.
On Thursday, the Court of Appeals for the Ninth District of Texas awarded a temporary injunction in favor of Huntsman, enjoining affiliates of Credit Suisse and Deutsche Bank from filing any lawsuit that alleges that the combined company would be insolvent or would be incapable of paying off its notes to the banks.
Huntsman's claims against the banks were consolidated 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. Huntsman is seeking more than $3 billion in actual damages, plus exemplary damages, attorneys' fees and interest, Huntsman said.
Based in Columbus, Ohio, Hexion makes thermoset resins. Huntsman is a Salt Lake City manufacturer of differentiated chemicals and pigments.
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