Huntsman Corp. hopes spinoff boosts its value

Salt Lake-based Huntsman Corp., the fourth-biggest U.S. chemical maker, plans to spin off its commodity-chemical and polymer units into a new company so investors will place a higher value on the remaining specialty businesses.

An outright sale of some units remains a prospect, Jon Huntsman, chairman and founder of Huntsman Corp., said Friday on a conference call with investors. Huntsman also said Friday its fourth-quarter loss widened to $61 million on hurricane-related costs.

The company's administrative offices are in The Woodlands, Texas, about 30 miles from Houston. Its headquarters remain in Salt Lake City.

"We don't anticipate this announcement today impacting the Salt Lake City office at all," spokesman Don Olsen told the Deseret Morning News on Friday. "When the split occurs, which will be six to nine months, I would think in the best case both of the companies will be Huntsman companies. Whether or not they carry the Huntsman name, they will both be Huntsman companies, so we don't anticipate that there will be any impact on the Salt Lake City office."

Specialty products deliver more stable profits and are affected less by wide fluctuations in energy and raw-material costs, compared with plastics and other commodities, Chief Executive Officer Peter Huntsman, the founder's son, said on the call. Shares in a specialty-chemical company should trade at a higher earnings multiple, he said.

"We are very frustrated with our valuation, and we see this as an opportunity to realize a higher multiple on the differentiated side of the business," Peter Huntsman said on the call.

Shares of Huntsman rose 43 cents, or 2.1 percent, to $20.74 on the New York Stock Exchange. They have dropped 27 percent in the past year.

Huntsman is spending money to expand its specialty businesses and shedding commodity units. The company agreed Friday to sell a Port Neches, Texas, butadiene plant to Houston-based Texas Petrochemicals Inc. for $275 million.

The proceeds will be used to buy a textile-dye business from Ciba Specialty Chemicals AG for $253.9 million in cash and assumed debt, an agreement announced earlier this week.

Huntsman earlier this month ended talks with potential buyers for the entire company after receiving bids that were too low. Huntsman said on Jan. 31 it was considering a sale after receiving an expression of interest from a prospective buyer late last year.