Rohm & Haas pushes Dow Chemical for financing details in attempt to close merger

By Lisa Kerner

Charlotte, N.C., Feb. 9 - Rohm & Haas Co. accused Dow Chemical Co. of embarking on an "aggressive campaign" to frighten Rohm & Haas employees and customers when Dow Chemical could be using its resources to complete the proposed merger of the two companies.

In a Feb. 6 letter to the Dow Chemical board of directors, Rohm & Haas called its most recent meeting with Dow Chemical principals on Jan. 24 "disappointing" and suggested a meeting of the companies' financial advisers.

Dow Chemical, according to Rohm & Haas, has failed to explain what it is dong to secure financing to close the merger.

"If your advisers provide to Goldman Sachs the specifics of your detailed action plan, including your presentations to the rating agencies and the reactions you received from each agency, it would establish an essential foundation for future discussions," Rohm & Haas said in the letter.

"Without this, a future meeting of principals would merely repeat our fruitless previous discussions," the company said.

Rohm & Haas' second-largest shareholder, Paulson & Co. Inc., has suggested that Dow Chemical use the committed $13 billion bridge loan and the $4 billion convertible preferred stock financing available to it to close the acquisition of Rohm & Haas, a Philadelphia-based specialty materials company.

Dow Chemical could then retire the bridge financing by reducing its dividend to one cent per share, selling $4 billion of new common equity and raising $5 billion in the bond market, Paulson said in a letter to the company.

As previously reported, Rohm & Haas asked the Court of Chancery of the State of Delaware to force the Midland, Mich.-based chemical company to complete its $78-per-share acquisition of Rohm & Haas under the companies' July 10, 2008 merger agreement.

Dow Chemical had announced it could not complete the acquisition by Jan. 27 as required under the agreement due to market conditions and the failure of Petrochemicals Industries Co. of Kuwait to complete the K-Dow joint venture. The company also denied that it has breached the merger agreement.

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