The president and chief executive of Huntsman Corp. said Friday the company will meet its obligations to the Huntsman family's charitable foundation, although the financial impact of a dispute between the company and its potential buyer remains to be seen.
In July 2007, Huntsman Corp. founder and chairman Jon M. Huntsman Sr. pledged $700 million in company stock to the Jon and Karen Huntsman Foundation, but the amount of the pledge may now be in question in the wake of a lawsuit filed this week by Hexion Specialty Chemicals Inc.
Company president Peter Huntsman said Friday that in addition to the stock that was pledged last year, there is also other funding that endows the foundation, including about $500 million that was given directly to the Huntsman Cancer Institute for scholarships and other vital functions of the facility.
"We obviously believe that over the years, that $700 million and the other gifts will continue to grow and appreciate," Peter Huntsman said. "With the commitments that have been made, there are certainly sufficient funds to be able to fund those things."
Jon Huntsman Sr. had said at least 80 percent of the foundation's charitable giving would be in Utah, with most going to fund cancer research through the Huntsman Cancer Institute. In addition, the Huntsmans have worked to battle homelessness and prevent abuse of women and children.
Huntsman Cancer Foundation president and chief executive Janet Bingham did not return a phone call Friday seeking comment.
Last summer, Apollo Management LP, through its Hexion Specialty Chemicals unit, offered $28 per share to acquire Huntsman Corp., which previously had accepted a $25.25 per share offer from the Dutch manufacturer Basell AF. After Basell failed to meet the new offer, Huntsman Corp.'s board approved the Apollo deal.
Hexion filed a complaint Wednesday in Delaware Chancery Court stating that the deal was no longer viable because Huntsman's debt had increased and profits wouldn't meet previous forecasts. The next day, Huntsman stock dropped $8, or 38 percent, to close Thursday at $12.86, the largest decline since the company went public in 2005. Huntsman Corp. is based in Salt Lake City and operates from The Woodlands, Texas.
Under the terms of the original agreement, Hexion would pay $6.54 billion in cash and assume $4 billion in debt, as well as $100 million toward a $200 million fee that Huntsman paid Access Industries Holdings LLC to end their merger agreement.
After the Hexion lawsuit this week, Jon Huntsman Sr. on Thursday blasted Apollo and vowed to "fight Apollo vigorously on all fronts." In an e-mailed statement, he said that "Apollo's recent action in filing this suit represents one of the most unethical contract breaches I have observed in 50 years of business."
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