COLUMBUS, Ohio (AP) -- Hexion Specialty Chemicals Inc., which is seeking to abandon a $6.5 billion buyout of chemical maker Huntsman Corp., on Friday rejected as inadequate a bid by a Huntsman shareholder group to finance at least $500 million of the buyout.
In July 2007, Huntsman accepted the $28-per-share buyout offer from Columbus, Ohio-based Hexion, an affiliate of Apollo Management LP, over a rival offer. But in June 2008, Hexion announced that Huntsman's deteriorating finances made the deal no longer viable and so it was backing out.
In response, Huntsman filed a $3 billion lawsuit claiming Apollo never planned to go through with the deal and was just trying to squeeze a rival bidder, Dutch manufacturer Basell AF.
Hexion, meanwhile, is suing Huntsman in a Delaware court to be free of the deal and the $325 million breakup fee. Trial in that matter is set to begin Sept. 8.
A Huntsman shareholder group Thursday offered to invest at least $500 million in the combined entity. Huntsman's founding family is part of that group.
On Friday, Hexion responded, saying that while it appreciated the shareholder effort, "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. We are not seeking to renegotiate this transaction."
Huntsman shares fell 10 cents to $13 in premarket trading. The stock has lost nearly half its value in the year to date.