Talk of selling gives shares of Huntsman a 7% boost

Shares of Huntsman Corp., the fourth-largest U.S. chemicalmaker, rose 7.4 percent Wednesday — the highest since August — after the company said it may sell itself and that talks have been held with prospective buyers.

Huntsman jumped $1.60 to close at $23.22 in New York Stock Exchange composite trading, giving the company a market value of $5.12 billion. Huntsman rose 11.4 percent Tuesday after The Wall Street Journal reported the possible sale.

Discussions have been held with a number of potential acquirers or merger partners since a potential buyer approached late last year, Salt Lake City-based Huntsman said Tuesday. Buyout specialist Apollo Management LP is a leading candidate, and other private-equity firms have expressed interest, the Journal reported.

"We believe an acquisition or merger of Huntsman is likely," Deutsche Bank analyst David Begleiter said Wednesday in a note to clients. "We continue to believe a takeout price of roughly $25 a share is the most likely scenario," though multiple offers may drive the price higher, he said.

Before Tuesday, Huntsman shares had fallen 16 percent since they were sold to the public on Feb. 10 last year at $23 a share.

An Apollo spokesman declined to comment Tuesday.

Huntsman is controlled by investor David Matlin and billionaire Jon Huntsman. His elder son, Jon Huntsman Jr., is the governor of Utah, and the younger son, Peter Huntsman, is Chief Executive Officer of Huntsman Corp.

All parties involved stand to benefit, Begleiter said. MatlinPatterson Asset Management, which holds 35 percent of the shares, would cash out its investment at a premium before chemical profits erode, he said. The Huntsman family could

roll its 24 percent stake into a private company after public investors failed to boost the shares.

Current Huntsman investors would probably get more than $23 a share, and the successful buyer would get Huntsman for less than it is worth, said Begleiter, who urged clients to buy the shares. Deutsche Bank helped underwrite Huntsman's IPO.

UBS Securities analyst Jeffrey Cianci said the buyout talks could boost Huntsman's share price to $28. He recommends buying the shares.

"This is a well-run, diversified company, and there could be even more value in a breakup of the divisions," Cianci said Wednesday in a note to clients.