PHILADELPHIA (Reuters) – Chemicals maker Huntsman Corp (HUN.N: Quote, Profile, Research, Stock Buzz) said on Thursday it was approached by potential investors offering funding to help complete its $6.5 billion takeover by Apollo Management and its Hexion Specialty Chemicals unit.
Hexion has claimed the deal is no longer feasible because of Huntsman's increased net debt, saying the combined company would be insolvent if the deal proceeded under the agreed terms.
Huntsman said the merged company would be solvent and that Hexion is required to complete the deal under the original terms. The two companies have filed lawsuits against each other.
“We believe that we can help you secure additional financing and allay your alleged fears regarding solvency or funding,” Huntsman said in a letter to Hexion filed with the U.S. Securities and Exchange Commission.
Huntsman asked permission to provide confidential information to these potential investors, who were not identified.
Hexion could not be immediately reached for comment.
Potential investors “have suggested that they would be willing to provide financing to Hexion … in order to facilitate the closing of the merger and provide the post- merger Hexion with additional working capital,” Huntsman said.
The potential funding also could eliminate “any possible concern about the solvency of the post-merger Hexion that may have been raised in the minds of the lenders under the commitment letter,” Huntsman said.
Although Huntsman contends the burden of funding the deal lies on Hexion, Huntsman said on Thursday it would assist obtaining supplemental or additional financing since the deal was in the best interest of its shareholders. (Reporting by Jessica Hall; editing by Carol Bishopric and Andre Grenon) (For more M&A news and our DealZone blog, go to here)