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[QUOTE]Originally posted by invester: [QB] [QUOTE]Originally posted by BuckeyeMatt: [qb] Are you following Huntsman HUN? [/qb][/QUOTE]This is the last I heard of the deal. It was something like a $15 billion price tag with debt. AP Banks ditch Hexion's $6.5B buyout of Huntsman Tuesday October 28, 4:50 pm ET By Ernest Scheyder, AP Business Writer Hexion's $6.5B buyout of Huntsman on ice; banks won't fund closing scheduled for Tuesday NEW YORK (AP) -- Two banks funding a buyout of Huntsman Corp. have backed out of the $6.5 billion deal, which grew increasingly rancorous as the economy worsened. Credit Suisse and Deutsche Bank told Hexion Specialty Chemicals late Monday that the combined company no longer meets standards set when the deal was crafted in July 2007. ADVERTISEMENT The buyout was slated to close Tuesday. The banks rejected an outside appraisal, released last week, that found the combined company could remain solvent in the current economic climate. "We have advised Hexion that neither the draft American Appraisal solvency opinion nor the draft solvency certificate of Huntsman's CFO is customary and reasonably satisfactory," the banks said in a joint statement. "Aspects of the methodology, assumptions and depth of information utilized in the solvency analysis have left the banks with serious reservations." At the height of the a buyout frenzy in the summer of 2007, Credit Suisse and Deutsche Bank agreed to finance the Hexion-Huntsman deal with a $15.35 billion debt package. "They committed to finance this transaction in a very different environment," said John Rogers, an analyst at Moody's Investors Service. If the deal goes through, the banks may record a substantial mark down, Rogers said. Hexion said it would hold the banks to the original agreement. "Hexion strongly disagrees with the banks' position and has advised them of their obligation to fulfill the financing commitment for the merger," Columbus, Ohio-based Hexion said in a statement. "While Hexion intends to meet and work with the banks today to try to complete the merger, if the banks do not fund their commitment, Hexion will vigorously enforce all of its contractual rights." A Texas appeals court last week sided with Huntsman when it blocked efforts by the two banks to file lawsuits that could prevent the takeover. The banks said that allowing the buyout to go forward could render Hexion unable to pay off existing debts. Hexion, an affiliate of private equity firm Apollo Management LP, tried to back out of the deal as recently as last month as Huntsman's financial condition worsened. Huntsman sued, and a Delaware court ordered Hexion to try to complete the acquisition. It has become increasingly difficult to arrange financing for mergers and acquisitions as the global credit crisis spreads. "Banks are trying to conserve capital," said Bart Narter, a banking analyst at Celent. "(They) aren't looking to lend money to each other, let alone private equity." Instead, financial institutions are working to shore up their balance sheets as the economy sours, he said. In an attempt to nudge Credit Suisse and Deutsche Bank to fund the deal, both Hexion and Huntsman have put up more capital. Apollo Management raised approximately $750 million, and Huntsman shareholders said Monday they would put up $217 million cash -- bringing their total commitment to $677 million -- if the deal closes. BB&T Capital Markets analyst Frank Mitsch said the case will likely end up in New York courts, though Credit Suisse and Deutsche Bank "are not strangers to settling litigation." "With the courts repeatedly ruling Huntsman's way, and as both parties continue to make financing concessions, we believe there are positive signs," he said in a note to clients. Mitsch rates Huntsman as "Buy" with a 12-month price target of $28, implying he expects the stock to more than double in value from Monday's $12 close. Shares of Huntsman rose 28 cents, or 2.3 percent, to $12.28 amid a broader market rally. Since the buyout was first announced on July 11, 2007, shares of Huntsman have dropped 56 percent. [/QB][/QUOTE]
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