The Woodlands, Texas - Huntsman Corp. has received an independent shareholder initiative to invest at least $500 million in Hexion on the closing of the merger deal between Huntsman and Hexion, the company announced 29 August.
The Huntsman family indicated its expectation to join the initiative by providing a portion of the $500 million.
The company said, "we are gratified by the confidence in the merged company expressed in this shareholder initiative. However, Huntsman management firmly believes that the combination of Hexion and Huntsman Corporation will be solvent."
In response, Hexion rejected the offer in a 29 August statement.
"While we appreciate the efforts of these shareholders, due to the dramatic increase in Huntsman's net debt and decrease in its earnings since last July, their proposal does not come close to making the combined company solvent. Huntsman's shareholders lack this information because Huntsman has, despite our repeated requests for more than two months, refused to permit its shareholders to review our Delaware complaint and the Duff & Phelps solvency analysis. If this information were made public, Huntsman shareholders would understand that this proposal is inadequate. Furthermore, the proposal is for incremental, not alternative debt financing, as specified under the merger agreement."
Hexion added, "We are not seeking to renegotiate this transaction. We are seeking to terminate it, and obtain judicial confirmation that Hexion has no obligation to pursue the acquisition or to pay Huntsman a termination fee."