MUTTENZ, Switzerland—Chemical giant Clariant A.G. has rejected a request to rethink its planned merger of equals with Woodlands, Texas-based Huntsman Corp.
In an open letter to Clariant, White Tale, which is a Cayman Island-based investment partnership set up by New York-based Corvex Management and 40 North Management, urged Clariant to reconsider the deal as it lacked "strategic merit."
The activist stakeholder also increased its stake in the Swiss chemicals group to more than 15 percent becoming the biggest stakeholder in the group on Sept. 19.
In the letter to Clariant, White Tale said it remained convinced "that the proposed merger is detrimental to Clariant shareholders."
"It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders," the letter added.
The firm said in response that its board of directors reconfirmed its decision that the planned merger was "the best value creating option" for all stakeholders and that it would not deviate from the binding agreement.
"White Tale's open letter does not contain any additions to claims previously made; in particular no tangible alternative of superior value creation is presented," Clariant said in a Sept. 19 statement.
The Swiss chemical group said a "vast majority" of its shareholders had expressed their support to the planned merger and that it would continue "constructive dialogue" with all its shareholders.
In May, Clariant and Huntsman announced the merger, which would create a specialty chemicals and plastics company with annual sales of around $13 billion.
The merger is scheduled to be completed by the end of 2017.