Huntsman and Clariant call off proposed merger on investor opposition
27 October 2017
Huntsman Corp and Clariant have terminated their proposed merger of equals by mutual agreement amidst continued resistance by investor activists to the transaction, saying there was uncertainty about securing two-thirds support for the merger.
Huntsman and Clariant noted that continued accumulation of shares by activist investor White Tale Holdings and their opposition to the transaction, now supported by some other shareholders, made the transaction uncertain.
There is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law.
The termination decision was unanimously approved by the Boards of Directors of Huntsman and Clariant.
''While we remain convinced that the proposed merger of equals as agreed to on May 21, 2017, is in the long term best interests of all of our shareholders, given the continued accumulation of shares by activist investor White Tale Holdings and their opposition to the transaction, now supported by some other shareholders, we believe that there is simply too much uncertainty as to whether Clariant will be able to secure the two-thirds shareholder approval that is required to approve the transaction under Swiss law," Peter R Huntsman, president and CEO of Huntsman, and Hariolf Kottmann, CEO of Clariant, said in a joint release.
"Under these circumstances and in light of the high level of disruption and uncertainty that has been created for both companies, we have decided jointly to terminate the merger agreement, stop the substantial expenditure of funds associated with integration planning, and proceed along our independent paths in the best interests of both companies and their shareholders, associates, and other stakeholder," they added.
No fees are currently payable under the terms of the Termination Agreement.
Separately, Huntsman reported its third-quarter profit significantly increased from last year. Huntsman reported that its third-quarter net income attributable to the company increased to $147 million or $0.60 per share from $55 million or $0.23 per share in the same quarter last year.
Adjusted income per share was $0.67 compared to $0.31 in the prior year period.
Quarterly revenues grew to $2.17 billion from $1.83 billion last year.
"While I am disappointed that the merger of equals agreement with Clariant has been terminated, Huntsman's future has never been brighter as our businesses continue to improve across the board, our balance sheet is as strong as it has ever been and will get even stronger with proceeds from upcoming Venator secondary sales. We look forward to achieving investment grade metrics in the near future." Peter R. Huntsman, our President and CEO, said