Huntsman Rejects Takeover Offers

Huntsman Corp. has ended talks with all parties that have offered to buy the chemical company, saying that "none of the proposals were in the best interests of the shareholders."

On Jan. 31, the day that published reports indicated Huntsman was entertaining offers from private equity firm Apollo Management, Huntsman's stock price jumped 11% to $21.62. Later that day, the company acknowledged it was discussing proposals that were presented late last year by unnamed suitors.

Huntsman had an initial public offering (IPO) about a year ago at $23 per share. The firm's stock got off to a fast start, hitting a high of $30 in less than a month. However, its shares have floundered since Hurricanes Katrina and Rita hit the Gulf Coast and slipped to a low of $16.50 in September.

Jon M. Huntsman, the company's founder and chairman, says the recent offers are unsatisfactory. "While the last proposals were above the price of our IPO last year, I believe they were not adequate, particularly in light of the risks, uncertainties, and extended timing of the proposed transactions," he says.

Jon Huntsman believes that his company's stock price doesn't reflect its full value. "Accordingly, we are continuing to evaluate the available alternatives for realizing this potential," he says.

CEO Peter R. Huntsman says the hurricanes will cost the company about $140 million before taxes in the fourth quarter of 2005 but adds that they won't have much impact in 2006. "We are enthusiastic about the global opportunities and prospects we see for 2006 and beyond, including expanding our differentiated business and possible divestitures to accelerate our debt reduction," he says.