Investors Snap up Huntsman's IPO

Signaling continued buoyancy in investors' view of the chemical industry, Huntsman Corp. has launched a successful initial public offering of stock, and Rockwood Specialties has filed documents for an IPO of its own.

At $23 per share, Huntsman's IPO was priced at the high end of the $21 to $23 range the firm anticipated earlier (C&EN, Feb. 7, page 12). The company sold 60.2 million shares, more than it had expected, and raised net proceeds of $1.45 billion. Its shares closed at $24.50, up 6.5%, at the end of their first day of trading.

Huntsman's IPO contrasted sharply with that of Celanese in January. That company, which like Huntsman is mainly a commodity chemical maker, initially priced its stock at $19 to $21 per share but dropped the offering to just $16 after investors balked at the price. Celanese's shares barely moved in their first day of trading, closing at $16.02.

John E. Roberts, a chemical analyst at Buckingham Research, says one big difference between the offerings is that Huntsman's proceeds went to pay down debt while Celanese's went to its owner, the Blackstone Group. "Huntsman is a stronger company for having gone public, while in the Celanese IPO only the pre-IPO owners benefited," he says.

Meanwhile, Rockwood Specialties Group, the specialty chemical maker owned by Kohlberg Kravis Roberts and DLJ Merchant Banking, has filed documents with the Securities & Exchange Commission to sell up to $500 million in common stock in its own IPO. Rockwood grew substantially last year with the acquisition of four of Dynamit Nobel's chemical businesses.

Huntsman and Rockwood are joining Nalco Chemical and Westlake Chemical as newly public chemical companies. Still in the pipeline is BP's planned IPO of its olefins and derivatives business.