The complicated legal fight over the implosion of the private equity buyout of Huntsman (NYSE: HUN) has been settled. The firm was able to get $632 million in cash and $1.1 billion in financing from Credit Suisse (NYSE: CS) and Deutsche Bank (NYSE: DB).

Basically, Huntsman claimed that these financial firms failed to uphold their responsibilities in backing the takeover from Hexion Specialty Chemicals, which was struck in July 2007 at $28 per share. Now, Huntsman is trading at $5.92, primarily because of the plunge in the global chemicals sector.

Continue reading Huntsman deal to kill private equity?

Huntsman deal to kill private equity? originally appeared on BloggingStocks on Wed, 24 Jun 2009 09:30:00 EST. Please see our terms for use of feeds.

Continue reading Huntsman pays its chairman $15 million for consulting

Huntsman pays its chairman $15 million for consulting originally appeared on BloggingStocks on Mon, 30 Mar 2009 08:00:00 EST. Please see our terms for use of feeds.

It's been the key question for Huntsman Corporation (NYSE: HUN): Deal or no deal?

Now we know. This week, the company reached an agreement with its private equity sponsor, Apollo Management, to end its $6.5 billion buyout transaction.

For the past six months, the parties have been embroiled in heated litigation with Huntsman getting the edge as the Delaware court ruled that Apollo had to use best efforts to close the deal . As a result, Apollo's settlement is not cheap. The fees come to about $1 billion.

Although, it's a good deal for both parties. Apollo could have lost even more money if the merger agreement had been enforced. As seen with the collapse of the BCE (NYSE: BCE) deal, there is no appetite for multi-billion-dollar deals. And since Huntsman is in a highly cyclical business - specialty chemicals -- it would have likely made it difficult to justify a buyout.

The dispute is far from over, though. Huntsman is still pursuing a lawsuit with its bankers -- Credit Suisse and Deutsche Bank -- on the deal. In other words, Huntsman may even snag even more money from the broken deal.

Still, Wall Street isn't too thrilled. In today's session, Huntsman's shares are down 44% to $3.27 by midday trading.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Apollo out of the Huntsman noose originally appeared on BloggingStocks on Mon, 15 Dec 2008 11:50:00 EST. Please see our terms for use of feeds.

Back in the summer of 2007, Apollo Management LP struck a typical private equity buyout. The deal called for paying $6.5 billion for Huntsman (NYSE: HUN), a chemicals company. In fact, the deal provided lots of synergy since Apollo already controlled a variety of similar businesses (through an entity called Hexion).

Well, of course, this was the peak of the private equity boom - and the credit markets began to unwind fairly quickly. What's more, the fundamentals of Huntsman started to weaken.

As a result, Apollo tried to extricate itself from the deal. And this meant a tough litigation fight.

Of course, this can be pretty a dicey thing. That is, the Delaware court ruled against Apollo and there was an order to get the deal done.

Yet again, this was bad news for Apollo (which has other faltering deals, such as Linens 'N Things). Actually, some of the top private equity firms have been taking some major hits lately, such as the TPG Group with its Washington Mutual (NYSE: WM) disaster.

So, to deal with the court ruling, Apollo has agreed to pony up $540 million to close the Huntsman transaction. Interestingly enough, Apollo has also agreed to give up its lucrative fees (amounting to $100 million or so).

This means that Huntsman should be on firm footing (especially in terms of its solvency). And, something else: the banks on the deal - which include Credit Suisse and Deutsche Bank - will have to raise the necessary funding, which will likely mean losing several billion on the transaction.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

More pain for Apollo Management: paying $540 milliont to Huntsman (HUN) originally appeared on BloggingStocks on Thu, 09 Oct 2008 13:41:00 EST. Please see our terms for use of feeds.

Continue reading Huntsman deal collapses; is Penn National next?

Huntsman deal collapses; is Penn National next? originally appeared on BloggingStocks on Thu, 19 Jun 2008 10:00:00 EST. Please see our terms for use of feeds.

Huntsman (NYSE: HUN), a chemical company, controlled by private equity investor David Matlin and Jon Huntsman, rejected Apollo Managements attempt to back out of merger a $28 cash merger agreement.

HUN is recently trading at $13.10 in pre-open trading, below its close of $20.86.

HUN overall option implied volatility of 82 was above its 26-week average of 48 according to Track Data, suggesting larger price risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option Update: Huntsman volatility up; rejects Apollo attempt to back out of merger originally appeared on BloggingStocks on Thu, 19 Jun 2008 08:38:00 EST. Please see our terms for use of feeds.

Paul Krugman's New York Times op-ed tries to defend his Princeton colleague, Federal Reserve Chairman Ben Bernanke. Krugman suggests that inflation is not a problem because he can't find any long-term labor contracts with 11% annual pay increases as in 1981's United Mine Workers contract.

Krugman gets himself into a weak position and he does not disclose his fealty to Bernanke whom he evidently does not believe can defend himself. It seems absurd to pretend that inflation is not a problem. Food prices have tripled and oil prices have doubled as Bernanke cut the Fed funds rate from 5.25% to 2%. Last week Dow Chemical (NYSE: DOW) announced a 20% price increase as did Eastman Kodak (NYSE: EK) in response to rising oil and other commodity prices. Huntsman Chemical (NYSE: HUN) announced a 25% price increase. And consumers -- who account for 70% of GDP growth -- expect inflation to rise at a rate of 7.7%.

Continue reading Krugman's lame defense of Bernanke's pro-inflation policy

Krugman's lame defense of Bernanke's pro-inflation policy originally appeared on BloggingStocks on Mon, 02 Jun 2008 09:57:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Sprint Nextel Corporation (NYSE: S) is disconnecting about 1,000 customers who have been calling customer service "excessively."
• According to the Wall Street Journal, Apollo Management has raised its offer for Huntsman Corporation (NYSE: HUN) to $28 a share, valuing Huntsman at $6.5B.
• The Financial Times (subscription required) reported that Moody's Corporation (NYSE: MCO), the credit rating agency, will issue a report today criticizing the private equity industry's increasing use of debt to buy companies.
• The Financial Times reported that Dow Jones and Company's (NYSE: DJ) board is reportedly making a final attempt to find a rival bidder for the company to compete with News Corporation (NYSE: NWS), contacting billionaire Ron Burkle.

• Virgin Media Inc's (NASDAQ: VMED) bankers have contacted ComCast Corp (NASDAQ: CMCSA) and DirecTV Group Inc (NYSE: DTV) to help "kick-start' an auction for the company, reported The Mail on Sunday.
• The New York Post reported, citing sources, that theme park operator Cedar Fair Entertainment (NYSE: FUN) has contacted private equity firms about the possibility of acquiring the company.

Newspaper wrap-up 7-09-07: Apollo raises offer for Huntsman originally appeared on BloggingStocks on Mon, 09 Jul 2007 09:15:00 EST. Please see our terms for use of feeds.

I guess some dealmakers don't take off for the 4th of July. That appears to be the case with Apollo Management.

The firm has made a $6.35 billion offer for Huntsman (NYSE: HUN), a large chemical operator.

Huntsman appears to be a hot commodity. Keep in mind that on June 26th, the company agreed to a $6 billion buyout from Basell AF.

Apollo has a lot of history in the chemical business. In fact, the firm plans to merge Huntsman with its Hexion Specialty Chemicals company. All in all, it looks like a pretty good fit.

It would also bring scale. While Hexion has sales under $5 billion, Huntsman generates sales of about $10.6 billion.

Basically, the Huntsman family wants to get liquidity for its charitable mission. And Apollo looks like it could give those efforts a nice boost.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Apollo lights firecracker on Huntsman deal originally appeared on BloggingStocks on Thu, 05 Jul 2007 10:00:00 EST. Please see our terms for use of feeds.