NEW YORK (Reuters) – Huntsman Corp (HUN.N: Quote, Profile, Research, Stock Buzz) said on Thursday it would fight an effort by Apollo Management to back out of the planned $6.5 billion takeover of the Texas company by Apollo's Hexion Specialty Chemicals.
“We believe Hexion and Apollo's actions are inconsistent with the terms of the merger agreement and the obligations to Huntsman and its shareholders,” Peter Huntsman, president and CEO of Huntsman, said in a statement.
On Wednesday, Hexion filed a lawsuit against U.S. chemical maker Huntsman that would seek to limit its liability if the deal falls apart.
“These actions appear to be a blatant attempt to deprive our shareholders of the benefits of the merger agreement that was agreed nearly a year ago,” Huntsman said.
Apollo said bank financing for the deal, one of the last still to close from the private equity buyout boom of 2007, was in jeopardy because of Huntsman's weakened financial position.
Huntsman's first-quarter adjusted earnings fell more than 70 percent from the year-earlier period, and Hexion has said the combined company would be insolvent under the deal's current capital structure.
(Reporting by Matt Daily; Editing by David Cowell)