Not a week after losing its bid for chemical maker Huntsman Corp., Access Industries Holdings which owns Dutch chemical unit Basell Holdings NV, successfully agreed to buy Lyondell Chemical Co. for $12.66 billion in cash - $19 billion including assumption of debt. The offer price of $48 per Lyondell share values the the company at 45% above its May 10 closing price, the day before Access' billionaire owner Len Blavatnik disclosed an 8.3% stake in Lyondell, sending shares climbing on takeover speculation. The offer values the shares at 20% above Monday's closing price. Shares jumped to $47, or 17.15%, in pre-market action as of 7:12 a.m. EST. Blavatnik said in the press release, "The combination of Basell and Lyondell creates one of the top chemical companies in the world," while Lyondell Chairman and CEO Dan Smith added, "This transaction offers significant value. The combination of our companies will enhance our opportunities." The two companies reported combined revenues of $34 billion for FY2006. The boards of both companies have already unanimously approved the deal.
Sources: Press Release, Wall Street Journal, Reuters, Bloomberg
Commentary: Billionaire Blavatnik Buys Rights on 8.3% of Lyondell Chemical, Shares Soar • Apollo Raises Huntsman Bid to $28 per Share -- WSJ • Apollo Tops Basell with $6.35 Billion Bid for Huntsman
Stocks/ETFs to watch: Lyondell Chemical Company (LYO). Competitors: Huntsman Corp. (NYSE:HUN), BASF AG (BF), Dow Chemical Co. (NYSE:DOW), EI DuPont de Nemours & Co. (NYSE:DD). ETFs: Materials Select Sector SPDR (NYSEARCA:XLB), iShares Dow Jones US Basic Materials Index (NYSEARCA:IYM), Vanguard Materials VIPERs (NYSEARCA:VAW)
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