Huntsman Corporation (NYSE: HUN) is now indicated down after a rise yesterday.  Apparently, Deutsche Bank and Credit Suisse have said they do not want to fund the Apollo-led merger with the Hexion merger financing.

Hexion announced that late last night it received correspondence fromcounsel to affiliates of Credit Suisse and Deutsche Bank that the banksdo not believe that the solvency opinion of American AppraisalAssociates and the solvency certificate of Huntsman CFO meet thecondition of the commitment letter.  As a result, the banks do not planto fund the proposed closing of the merger scheduled for this morning.Hexion has said that it will vigorously enforce all of its contractualrights if the banks do not fund their commitments.

It is harder to guess which is a bigger surprise here.  This merger hasbeen very convoluted from the start.  Banks seem to be in the boat ofnot wanting to loan money regardless of terms right now.  Andmulti-billion dollar private equity LBO’s are so 2006 to 2007.

With all of the infighting that has taken place in this merger, almost nothing can come as any shock.

Huntsman shares were trading down about 7% at $11.20 right before the open.  Stay tuned.

Jon C. Ogg
October 28, 2008

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