Attila the Huntsman (HUN)

Huntsman Corp. looks like it may be trading up 50% pre-market after a recent battering.  This chemicals and products maker had been down and out after its private equity buyout from Apollo Management & Hexion was terminated by the buyers.  In a twist of fate, a Delaware judge has issued an opinion refusing toallow Apollo to walk away from its $6.5 Billion buyout.  For the private equity firms, the hunters may have become the hunted.

What isinteresting here is that this may not actually force a merger atoriginal terms.  It may not even force a merger at all.  But itstrengthen the case that Huntsman’s business deterioration was not an unforeseeable change nor a material change in business as much is partof the environment.  This will likely strengthen the case that Huntsmanwill be entitled to larger termination fees and possibly to punitivedamages if things continue going in its favor.

Apollo and Hexion had alleged that Huntsman was not entitled to a $325million break up fee and had suffered a Material Adverse Effect sincesigning the Merger Agreement and that a solvency certificate or opinioncould not be provided for the combined Hexion/Huntsman entity at theclosing.  Huntsman continues to seek damages exceeding $3 billion inits Texas lawsuit against Apollo and its partners Leon Black and JoshuaHarris.

Shares are indicated up at $11.60 on active pre-market trading volume.Shares closed at $7.35 yesterday and its 52-week trading range is $7.01to $27.00.

Jon C. Ogg
September 30, 2008