Apollo Management LP, the private- equity firm, agreed to pay $700m to Huntsman Corp. to terminate a $6.5bn LBO of the chemical maker by its Hexion Specialty Chemicals Inc. unit.Apollo will pay Huntsman $425m in cash and buy $250m of convertible notes, Columbus, Ohio-based Hexion said yesterday in a statement. Hexion said it expects Credit Suisse AG and Deutsche Bank AG, lenders on the $6.5 billion leveraged buyout, to fund a $325m breakup fee to Huntsman.
The Huntsman deal, announced in July 2007, has repeatedly landed in court as New York-based Apollo and the banks questioned whether the company would be financially viable after the takeover. Huntsman sued Hexion in June in Delaware Chancery Court to meet the terms of their takeover agreement.
The settlement doesnâ??t resolve litigation between Huntsman and Credit Suisse and Deutsche Bank in Montgomery County, Texas, Huntsman said in a separate statement. A trial on that lawsuit, which claims that the banks conspired with Apollo and interfered with a prior Huntsman merger agreement, is set to begin on May 11. Apollo has agreed cooperate with Huntsman in the case, the company said.
