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U.S. chemicals group Huntsman Corp., which accepted a $5.6 billion offer Tuesday from Dutch polypropylene plastic manufacturer Basell Holdings, has received a $6.35 billion counterbid from a division of private-equity firm Apollo Management. HUN 05 July 2007Basell is a unit of Access Industries Holdings, a conglomerate owned by billionaire Len Blavatnik. The Apollo division, Hexion Specialty Chemicals, has offered $27.25 per share in cash, 8% more than Basell's $25.25 per share offer. Including debt, Basell's bid is worth about $9.6 billion and Apollo's $10.4 billion. If Huntsman chooses not to take Basell's offer, that company will be entitled to a $200 million breakup fee, half of which Hexion has agreed to pay as part of its offer. Huntsman's products are used in paint, shoes and cleaning materials. The Basell offer values Huntsman at about 8.6x Ebitda. In May, Apollo and Access were rival bidders for G.E.’s plastics unit. They eventually lost out to the Saudi Basic Industries Corp., which paid $11.6 billion.

Sources: Bloomberg, MarketWatch, Reuters, New York Times
Commentary: Chemical Convergence: Basell Buys Huntsman Corp. For $9.6 Billion Including DebtApollo Trumps Basell with $10.4 Billion Huntsman Bid [Chemical Reaction]
Stocks/ETFs to watch: Huntsman Corp. (HUN). Competitors: BASF AG (BF), Dow Chemical Co. (DOW), EI DuPont de Nemours & Co. (DD). ETFs: Materials Select Sector SPDR (XLB), iShares Dow Jones US Basic Materials Index (IYM), Vanguard Materials VIPERs (VAW)

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Source: Apollo Tops Basell with $6.35 Billion Bid for Huntsman