Banks scupper quick close of Huntsman merger
The protracted and bitter merger between family-owned Huntsman and their private-equity backed rivals Hexion Speciality Chemicals has suffered a new setback as Credit Suisse and Deutsche Bank have announced they will not provide immediate funding.
The banks do not believe that the combined company will be solvent – a claim first made by Hexion back in June. However, since then, a district judge forbade both banks from filing any lawsuit that seeks to declare that the combined company would be insolvent, or that it would be unable to pay its debts when due.
Huntsman has also won a series of court battles that have found in its favour. In September, the Chancery Court in Delaware ordered Hexion to consummate the merger as quickly as possible.
Just last week, Huntsman announced it had received a written opinion from American Appraisal, a leading valuation firm, concluding that the combined company would be solvent.
However, the banks do not agree with this valuation and the deal is once again at an impasse, despite Hexion stating that it is working to resolve the banks' concerns and is still seeking to close the merger.
For its part, Huntsman has said it will continue to enforce its rights under the Merger Agreement and the various court orders.
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