Apollo Ups Its Offer For Huntsman

Hexion Specialty Chemicals, the thermoset resins maker owned by private equity firm Apollo Management, has increased its offer for Huntsman Corp. The new bid may force Huntsman to forgo its previously agreed-upon sale to the polyolefins maker Basell.

The $28.00-per-share offer, which Hexion announced yesterday, values Huntsman at $6.2 billion. The total transaction would be worth $10.5 billion, including debt. On July 4, Hexion offered $27.25-per-share for the company.

On June 28, Huntsman agreed to a $25.25-per-share buyout from Basell, which is owned by private equity firm Access Industries. The Huntsman family and private equity firm Matlin Patterson, which together hold 57% of Huntsman Corp. stock, approved the transaction.

Now, Huntsman may be poised to change direction. The transaction committee of Huntsman's board of directors has determined that the $27.25-per-share Hexion bid constitutes a "superior offer" under terms of its previous agreement with Basell. Technically, however, Huntsman's full board hasn't changed its recommendation for the Basell deal, which it can do until a deadline on Wednesday. Huntsman hasn't commented on Hexion's new offer.

In the meantime, Basell could still increase its own bid. The company, so far, will not comment on its plans. "We have a few days and are examining our options," says an Access Industries' spokesman.