At just over $13, Dow Chemical (NYSE:DOW) is already trading near its 52-week low. The shares may go lower. Rohm & Haas (NYSE:ROH), which is being bought by Dow, is suing to get the deal finished.
According to Dow Jones, "Dow confirmed that it doesn't intend to close the merger by a Tuesday deadline, with Chief Executive Andrew Liveris calling the deal 'untenable at this time' in a prepared statement. "
Dow is in a pinch. A joint venture with Kuwait, which should have brought in billions of dollars, was canceled. And, banks are not likely to lend money for most M&A deals. Private equity firms have shut off almost all of their investment activity.
If Dow loses the suit, it could face damages that could nick its balance sheet. It could also be forced to close the deal, but that it not as likely. Rohm may prefer getting a penalty payout rather than going through with a deal with a wounded company.
Either way, Dow is in trouble.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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