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Huntsman family wins sweet victory over private equity firm

Family-owned Huntsman Corporation has won its court battle with private equity firm Apollo Management over the proposed merger with Hexion Specialty Chemicals.

The Chancery Court in Delaware ordered Hexion to consummate the merger as quickly as possible. It also decreed an extension to the merger termination date if Hexion does not fully comply with its order.

Apollo and Hexion filed a lawsuit against  the family company in June claiming it would be insolvent should the merger, which was originally signed in September 2007, go through.

They alleged that Huntsman was not entitled to a $325 million break up fee and they had since suffered a material adverse effect. Huntsman counter sued and the trial began at the beginning of September.

"We are gratified that Apollo's allegations and tactics have failed to persuade the court," said Peter R Huntsman, president and CEO of Huntsman.

"Huntsman is a strong and dynamic company and Apollo's misguided attempt to use 2008's turbulent energy and financial markets to construct a solvency issue where none existed has now been exposed. We call on Hexion to complete the remaining actions required by the merger agreement in compliance with the court's order and proceed to closing."

In addition, the court found that Hexion had breached a number of its obligations and covenants in a knowing and intentional way as directed by Apollo.

Jon M Huntsman, founder and chairman, added: "We have claimed all along that Apollo would resort to any means necessary to break a legal and binding contract.  Apollo was dishonest and untruthful and lost the case."

Huntsman continues to seek damages exceeding $3 billion in its Texas lawsuit against Apollo and its partners Leon Black and Joshua Harris.

Hexion has so far not issued a public response to the hearing.

Related link:
Huntsman family's latest attempt to smooth sale is rebuffed

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