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Banking, finance, and taxes

Huntsman Back In M&A Play! Private Equity Deal Returns From Dead (HUN, APO, BAC, KKR, DD, DOW)

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By Jon C. Ogg Updated Published
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Huntsman Corporation (NYSE: HUN) is rumored to be back in play.  If you will recall, this was the subject of a private equity buyout back during the private equity bubble and its $6.5 billion buyout fell apart. Reuters and CNBC reported that Bank of America Corporation (NYSE: BAC), via BofA/ML, has reached out to KKR& Co. (NYSE: KKR) and other private equity firms to see what interest there would be. Huntsman trades at only about 6-times 2012 and 2013 earnings estimates.

Apollo Global Management, LLC (NYSE: APO) was the previous acquirer via its Hexion Specialty Chemicals unit.  This company was literally gutted during the recessionary stock sell-off and even a 6% gain to $12.62 today is not a 52-week high. Huntsman settled with Apollo for far more than the $325 million breakup fee. Huntsman trades in a 52-week range of $8.13 to $20.36.  The question to ask is just what sort of premium it can garner in a private equity consortium deal.  The market cap here is $2.9 billion and the dividend is 3.3%.

The chemicals player valuation compares to E. I. du Pont de Nemours and Company (NYSE: DD) trades at 11.4-times expected 2012 earnings and The Dow Chemical Company (NYSE: DOW) and about 12.4-times expected 2012 earnings.

Currently, the consensus analyst price target is $17.10 according to Thomson Reuters. Talk about a blast from the past!

As with all stories of this sort, we would treat this as a rumor until more concrete data surfaces.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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