Through The Fly's Eyes: M&A

from Tedd Cohen of Theflyonthewall.com




















Basell Takes Huntsman; Lyondell Left Standing

Today came word that Basell, a leading producer of polypropylene, and a part of billionaire investor Leonard Blavatnik’s Access Industries, is buying Huntsman (HUN), a chemical products manufacturer, in a cash deal for $9.6B or $25.25 per share, including debt. There’s little chance that there will be a rival bidder. That’s certainly a relief for Huntsman, as they have been on the block for a while, including one deal last year that collapsed. The deal is expected to close in the fourth quarter of this year.

Now, what does that mean for Lyondell Chemical (LYO), itself a global manufacturer of chemicals and plastics? Just last month Blavatnik bought the right to acquire 8.3% of Lyondell. In the SEC filing, it was implied that he’d merge Lyondell with Basell. The Huntsman deal would seem to put an end to that. Lyondell shares are down approximately 3% in trading late this morning.

Not everyone is impressed with Basell’s Huntsman deal. One observer cited a lack of synergy.

Who else in the industry might be a takeover target? Hercules (HPC), whose shares are no longer trading at a discount, Cytec (CYT) and OMNOVA (OMN) are all said to be possibilities.