Yes, it's Halloween, but is a crystal ball really necessary to gaze
into the future of the Hexion Specialty Chemicals Inc. and Huntsman Corp. deal with all of the hurdles it has had
to go through already? As if there hasn't been enough problems getting the deal done, now Deutsche Bank AG and Credit Suisse Group, which are financing the
$6.5 billion deal, look like they are pulling out.
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In a press release
Huntsman revealed that the two banks are pulling out of the deal, which was planned to close Tuesday.
From Huntsman's press release:
Hexion had received correspondence from counsel to Credit Suisse and Deutsche Bank that the banks do not believe that the solvency opinion and certificate proposed to be provided meet the condition of the commitment letter and effectively said that as a result the banks do not plan to fund the proposed closing of the merger scheduled for this morning. Accordingly, Huntsman does not expect the merger to close today. Hexion further informed Huntsman that it is working to resolve the banks' concerns and is still seeking to close the merger.
While the banks' decision is the latest kink in the buyout, it certainly makes you wonder with all of the earlier legal troubles whether the deal is really meant to be. Think about it. The problems all started when Hexion, which is owned 92% by Apollo Management LP, agreed in July 2007 to buy Huntsman for $10.5 billion. From then on everything seemed to fall apart: The subprime mortgage crisis developed, then came the doubts about whether the parties could close the deal, the lawsuits and now the banks potentially withdrawing. If the deal happens, what catastrophe awaits when the companies integrate? Anyone want to try tarot cards? -
Maria Woehr
