Rohm & Haas and Dow Deal Back At $78? (ROH, DOW)

The Rohm & Haas (NYSE: ROH) acquisition by Dow Chemical (NYSE: DOW) is actually going to close if CNBC’s David Faber is accurate.  Faber just reported some merger news that may seem out of place for the economy today.  More importantly, he said that the $78.00 per share cash buyout is going to stand for the common holders of Rohm & Haas.

The buyout will not be at the full consideration originally shown.  The Haas family trust and Paulson & Co, will receive $2.5 billion in preferred equity in the new company, and Dow can issue a additional $500 million worth of preferred to those two parties.  The rest of the compensation to them will be in the cash buyout price, but this will save Dow from having to fork out $2.5 to $3 billion in cash of that total merger.

Get the closing date: NO LATER THAN APRIL 1. Interestingly enough, the WSJ has run a report noting that no settlement has yet been reached.

This is pretty amazing when you consider what has happened in the economy.  It looks like shares were halted at $74.91, but that was after a 17% run.  We did expect a settlement of some sort.  But we expected a mere payment of damages or a much lower price to the merger than the $78.00 price tag.  On Friday morning, Rohm & Haas common stock was trading under $55.00.

JON C. OGG