THE WOODLANDS, Texas (June 24, 2008) — Huntsman Corp. has filed suit against Apollo Management L.P. for $3 billion in response to a merger deal gone sour.
Huntsman said it is suing the firm, along with partners Leon Black and Joshua Harris, for fraud and tortious interference. Huntsman said Apollo convinced the firm to drop a merger agreement in the works with Basell Service Co. B.V. and instead enter a $10.6 billion deal with Apollo affiliate Hexion Specialty Chemicals Inc. — a deal those firms now are rescinding.
Huntsman's suit is in response to a suit filed June 18 by Hexion and Apollo that claims they are not bound to closing the merger agreement at $28 per share. In that suit, Apollo cited increased net debt and lower-than-expected earnings for Huntsman as grounds for backing out of the merger.
Huntsman said it seeks a jury trial to determine Apollo and Hexion's liability for actual damages exceeding $3 billion, plus exemplary damages.
Peter Huntsman, Hunstman president and CEO, has accused Apollo of falsely representing its commitment to close the Hexion merger to delay the process and lower the price of the deal. He said contrary to the claims of Apollo and Hexion, his firm is “a strong and profitable company, with ample financial resources to continue operating our businesses.”
Hexion called the suit filed by Huntsman “baseless” and continues to claim that continuing the merger under the original terms would render the combined company insolvent.