Huntsman breaks off talks with buyers

In November, Huntsman reported a third-quarter net loss of $29.8 million as plant maintenance and Gulf Coast hurricanes reduced output.

"We do not expect continued hurricane impact of any significance into 2006," Chief Executive Officer Peter Huntsman said in the statement.

Huntsman is controlled by investor David Matlin and billionaire Jon Huntsman Sr., 68. Matlin's MatlinPatterson Asset Management holds 35 percent of the shares, and the Huntsman family owns 24 percent.

Jon Huntsman Sr. founded the company in 1970 as a container maker, creating the Styrofoam "clamshell" boxes for McDonald's Big Mac hamburgers in 1974. His debt-financed acquisitions over the next two decades boosted 2004 sales to $11.5 billion on products such as laundry detergent ingredients, gasoline additives and plastics for car interiors.

The company makes commodity chemicals such as ethylene for plastics and white pigment for paper. It makes differentiated products in three units: advanced materials, polyurethanes and performance products.

Huntsman's polyurethanes unit has one of the industry's most attractive products in MDI, or diphenylmethane diisocyanate, which has 20 percent profit margins and sales that are growing at 6 percent to 8 percent a year, Deutsche Bank analyst David Begleiter said Jan. 31 in a note to clients. Huntsman is the world's largest producer of MDI, used to make foam insulation and furniture.

MDI helped Huntsman almost double polyurethanes profit in the third quarter to $193.7 million. Polyurethanes are "the key strategic interest in any takeover," JP Morgan analyst Jeffrey Zekauskas said in a Jan. 31 note to clients.

Dow Chemical Co. is the biggest U.S. chemical maker by 2004 sales, followed by Exxon Mobil Corp., DuPont Co. and Huntsman.

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E-mail: Shayward2@bloomberg.net; jkaskey@bloomberg.net.