Apollo Management LP's Hexion Specialty Chemicals unit said this week that its banks won't provide alternate financing for a $6.54 billion takeover of chemical maker Huntsman Corp. because of the current state of capital markets. Deutsche Bank AG and Credit Suisse Group said they aren't obligated to provide alternate financing under their year-old commitment letter, according to a July 2 letter filed by Hexion on Thursday with U.S. regulators. A Duff & Phelps LLC solvency opinion and "our views of the current financial and debt capital markets" led to the denial, the banks said.
Hexion, which claims that Huntsman's finances deteriorated in the past year, sued the company in Delaware last month to terminate the merger agreement. Huntsman responded by suing New York-based Apollo and partners Leon Black and Joshua Harris for more than $3 billion in a Texas court.
Hexion is asking Huntsman for permission to pursue alternative financing, as required by the merger agreement, according to the filing. Huntsman is run from The Woodlands, Texas, and Salt Lake City.