Huntsman Corporation (NYSE: HUN) ended the tumultuous week in indecision. While showing signs of a bounce and setting higher highs and higher lows, Huntsman shows few real signs of what is to come next week.
Huntsman announced after the market closed Friday, the company received the $325 million termination fee provided by the Merger Agreement. Credit Suisse AG and Deutsche Bank AG provided Hexion with the funds to cover the payment, in condition with a six-year loan.
Huntsman expects to receive $500 million more by December 31, 2008 from Hexion and Apollo Management, Hexion's parent company. $250 million of the remaining funds to be paid before December 31, 2008 is on condition of the issuance of 10 year Huntsman convertible notes to Apollo. The remaining $175 million is to be paid by March 31, 2009.
Initial research indicates Huntsman largely appears to be the same company it was prior to the announcement of the merger. While the global recession has certainly taken a toll on the company and affected profits and performance, the large downtrend in the price of the company's stock is more directly related to the collapse of the merger. In other words, investor confidence soured based more upon the emotions of a merger collapsing than the fundamentals of the business. Investors have let their emotions get the best of them as Huntsman's business will rebound with the global economy and the company will have an extra $1 billion in their pocket. And the true irony is, why would Apollo Management who dissolved the merger seek 10 year convertible notes if the private-equity firm did not have confidence in Huntsman Corporation?
Huntsman announced after the market closed Friday, the company received the $325 million termination fee provided by the Merger Agreement. Credit Suisse AG and Deutsche Bank AG provided Hexion with the funds to cover the payment, in condition with a six-year loan.
Huntsman expects to receive $500 million more by December 31, 2008 from Hexion and Apollo Management, Hexion's parent company. $250 million of the remaining funds to be paid before December 31, 2008 is on condition of the issuance of 10 year Huntsman convertible notes to Apollo. The remaining $175 million is to be paid by March 31, 2009.
Initial research indicates Huntsman largely appears to be the same company it was prior to the announcement of the merger. While the global recession has certainly taken a toll on the company and affected profits and performance, the large downtrend in the price of the company's stock is more directly related to the collapse of the merger. In other words, investor confidence soured based more upon the emotions of a merger collapsing than the fundamentals of the business. Investors have let their emotions get the best of them as Huntsman's business will rebound with the global economy and the company will have an extra $1 billion in their pocket. And the true irony is, why would Apollo Management who dissolved the merger seek 10 year convertible notes if the private-equity firm did not have confidence in Huntsman Corporation?
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