Sterling Chemicals' convertibles holders to get 81% in Eastman merger

By Toni Weeks

San Diego, June 22 - Holders of Sterling Chemicals, Inc.'s series A convertible preferred stock have agreed to support the company's merger with Eastman Chemical Co. and will receive only $92,928,850 for their preferreds, about 81.18% of the July 1 liquidation value of $114,473,006, according to a press release. The April 1 liquidation value of the preferreds was $110,070,204.

The merger, in which Eastman Chemical will acquire all of Sterling Chemical's outstanding equity for $100 million in cash, is expected to close in the third quarter of 2011 after the receipt of regulatory approvals and the satisfaction of other customary closing conditions.

The holders of Sterling Chemicals' common stock will receive $2.50 per share in cash, representing a 63% premium over the recent market price of $1.53 and a 94% premium over the 90-day volume-weighted average trading price.

Sterling is a Houston-based petrochemicals company. Eastman is a Kingsport, Tenn.-based manufacturer of chemicals, fibers and plastics.

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