Huntsman Holdings Corp. said Tuesday it has ended its attempt to acquire Pittsburgh-based Aristech Chemical Corp. but left the door open for renewed negotiations in the unlikely event the company's takeover agreement with its senior management, financed by Japan's Mitsubishi Corp., should falter.
Chairman Jon M. Huntsman, the largest single stockholder in Aristech, made his initial $25 per share offer for the company last October, a bid that was turned down by Aristech's directors as "inadequate." Last month the company accepted a rival bid of $26 - later boosted to $27 to match Huntsman's informal offer - in a bid financed by Mitsubishi.Since then, Huntsman has been negotiating for more time to determine if he would top that offer.
"Over the past two weeks we have employed in excess of 50 professional people at significant expense to complete our due diligence review of all aspects of Aristech's operations to determine, prudently, the maximum amount one should pay for this company," said Huntsman.
"We have now completed that review, and have concluded we will not make an offer to acquire Aristech for a price in excess of $27 per share. However, in the event the Mistubishi offer is terminated and a Mitsubishi/Aristech merger is not consummated, we will re-examine our options and may determine to make a renewed offer to acquire Aristech."
Despite losing the takeover battle, Huntsman's shares in the company have soared in value by millions as a result. Nevertheless, Huntsman has always emphasized that he was sincere in wanting to acquire Aristech.
"We have negotiated always in an open and honorable fashion with Aristech's chairman, Thomas Marshall," said Huntsman. "We notified him in advance of every filing and key decision undertaken by Huntsman Holdings Corp. We were, in fact, complimented by Mr. Marshall for our openness, candor and `friendly approach.' "
Huntsman operates chemicals and plastics businesses that had total revenue of $1.4 billion in 1988. Mitsubishi, a worldwide trading concern, had annual sales of more than $100 billion.
Mitsubishi and Huntsman wanted Aristech's polypropylene business, a substance used in manufacturing plastics, the consumption of which is growing internationally. Aristech, which employs 1,800 in eight states, is the chemical unit spinoff of USX Corp., the nation's largest steelmaker.
When Huntsman said he might offer $27 per share for the company - a $934.2 million offer - it was predicated on Aristech's board giving him extra time to conduct "due diligence" research of the company, including reviewing financial data and forming a joint venture with General Electric Co.'s GE Plastics Division to finance the offering.
When Mitsubishi agreed to match that offer, Huntsman continued his due diligence but, as noted Tuesday, decided $27 was as high as he wanted to go.
Aristech has about 32 million outstanding shares or the equivalent of about 34.6 million fully diluted outstanding shares. Huntsman currently owns 8.7 percent of the company's stock, according to Huntsman spokesman Joele Frank.