NEW YORK (Reuters) – Huntsman Corp and Hexion Specialty Chemicals have begun talks to reduce the price of their $6.5 billion merger, The New York Times’ DealBook reported on Friday, citing people briefed on the matter.
Huntsman (HUN.N: Quote, Profile, Research, Stock Buzz) and Hexion, which is owned by private equity firm Apollo Management LP [APOLO.UL], are discussing lowering the price, currently $28 a share, but the Times’ cited one person as saying Huntsman was unwilling to go below $25.25 a share, the price a previous suitor, Basell, had offered in 2007.
It was possible the two could start to renegotiate terms, a source familiar with the matter said.
As part of a renegotiated deal, Hexion is seeking to stay Huntsman’s lawsuit in Texas, where Huntsman is based, against Apollo, the people cited by the Times said.
In June, Huntsman sued Apollo, accusing it of interfering with the merger between Huntsman and Hexion by outbidding Basell with an offer it did not intend to honor.
Hexion had been trying to back out of the $28 a share deal, citing insolvency concerns about the combined company. But a Delaware court in September ordered the companies to honor the terms of their merger agreement. The judge said that, if Hexion’s refusal to close the deal resulted in a breach of contract, it would be liable to Huntsman for damages.
Hexion agreed to buy Huntsman in July 2007, but the deal has stalled in the courts as Apollo has been unable to get out of its commitment in the aftermath of the credit crisis.
Hexion recently lost a bid to extend its financing commitment from Credit Suisse Group AG (CSGN.VX: Quote, Profile, Research, Stock Buzz) and Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz) after they refused to finance the transaction.
Hexion declined to comment and Huntsman could not immediately be reached for comment.
(Reporting by Phil Wahba and Megan Davies)