Mumbai: Huntsman Corporation has extended the deadline for closing a merger deal with Hexion Specialty Chemicals again, by 90 days to 2 October, and filed a countersuit in the Delaware court to force the reluctant suitor to consummate its $11 billion takeover deal. 

Huntsman first agreed to be acquired by Hexion for $28 per share, or about $10.6 billion, on 12 July 2007.

Huntsman filed its counterclaims in the Delaware court on breach of contract, defamation and other charges. The suit came in response to a 19 June lawsuit by Columbus, Ohio-based Hexion which sought to terminate the year-old merger agreement.

Huntsman, based in Salt Lake City and run from The Woodlands, in its countersuit, also sought a $325 million reverse-break-up fee if the deal doesn't go through, as well as unspecified damages to shareholders.

Together, these damages could top $4.5 billion, given the sharp drop in Huntsman's stock price since Hexion walked out of the merger deal, Peter Huntsman, president and CEO of the company, said.

Hexion, a specialty chemicals company owned by private equity firm Apollo Management, last month withdrew its $28-a-share takeover offer for Huntsman saying the merger was 'not viable.'

Hexion contends that Huntsman Corporation's actions to extend the merger agreement between the two companies were 'improper' and that there is 'no factual basis' to conclude that the combined company would be solvent.

Hexion said Huntsman's poor financial results, mounting debt and uncertain prospects would in fact make the merged company insolvent.

Hexion CEO Craig O Morrison in a statement said claims in Huntsman's countersuit were "without merit."

The merger between Huntsman and Hexion was expected to create a company with sales of $14 billion and more than 21,000 workers at 180 sites worldwide, the companies said at the time.

Huntsman said the company's earnings were down only 6 per cent in the 12 months since the July 2007 merger announcement versus the 12 months leading up to it. Such a drop should not be considered a "material adverse effect," he added.

Huntsman also alleged that Hexion's parent Apollo has deliberately tried to delay the deal and create enough problems to force Huntsman back to the bargaining table and negotiate a lower price.