Huntsman Corp. gets higher offer

Apollo Management has offered $6.35 billion for Huntsman Corp., topping a $5.88 billion bid from Access Industries announced last week.

The New York-based buyout firm offered $27.25 a share in cash, Huntsman said in a statement Wednesday. That's $2 more than Access' recommended bid made on June 26.

Apollo would combine Huntsman, the world's biggest maker of epoxy adhesives, with its Hexion Specialty Chemicals division, the No. 1 producer of binding resins used in plywood. New York-based Access planned to buy Huntsman to add specialist products to its Dutch chemicals business, Basell Holdings.

"The Basell offer seemed fair, but a company that's already engaged in specialty chemicals might be able to extract more synergies and can afford to pay more," said Marcus Konstanti, a chemicals analyst at Sal. Oppenheim in Cologne, Germany. "Whether Basell and Access bid again may depend on how important they think this is strategically in defending against a downturn."

Shares of Huntsman, the fifth-biggest U.S. chemical maker, have advanced 29 percent so far this year, rising 0.2 percent to $24.40 in New York Tuesday.

Huntsman, which is run from Salt Lake City and the Houston area, said its board and a committee of independent directors have concluded that the new approach "could reasonably be expected to lead to a superior proposal" and are in talks with Hexion.

The company indicated in February it might be open to takeover as Chairman Jon Huntsman Sr. seeks funds for philanthropic work. Prior to the Access bid, Huntsman's stock had fallen 18 percent since a share offering in February 2005, prompting the company to shed commodity chemicals and focus on products that are less exposed to swings in the economy and raw-material prices.

As well as making epoxy adhesives, Huntsman is the second-largest producer of methylene diphenyl diisocyanate, or MDI, used in polyurethane products such as foam insulation, coatings and adhesives. It also produces textile dyes and titanium dioxide, a white pigment.

Hexion, based in Columbus, Ohio, makes a range of performance resins, adhesives and coatings, together with basic chemicals, for customers in the agricultural, construction, automotive, electronics and oil industries, according to its Web site. The company had sales of $4.5 billion in 2005, compared with $10.6 billion at Huntsman last year and 10.5 billion euros ($14 billion) at Basell Holdings.