Huntsman shares plunge
Market value drops after buyout talks break off
Huntsman fell $1.90, or 8.3 percent, to close at $21.05 per share on the New York Stock Exchange, reducing the company's market value by about $419 million to $4.64 billion. The rejected bids were above the February 2005 offering price of $23 a share, Huntsman said.
Billionaire founder Jon M. Huntsman Sr. and investor David Matlin, who owns 35 percent, considered a sale after investors sent the shares down as much as 27 percent amid concern that rising costs will erode profit. Huntsman and Matlin aimed to shed their controlling stakes before chemical earnings begin to slide, Greenwich Consultants analyst Michael Judd said.
"They were unhappy with the stock price and looking for an exit strategy," Judd said Monday in a telephone interview. "It's no coincidence the company went public during the big euphoria" about resurgent chemical profits, Judd said. He recommends selling the shares.
Before Monday, Huntsman shares had risen 18 percent since Jan. 30, before talks were disclosed.
"It appears unlikely that another buyer would emerge with a significantly higher offer," Alexander said Monday in an interview from New York. "We expect them to remain in the trading range of the last few months until there is more clarity on their ability to improve free cash flow in 2006." He rates the shares "neutral."
Total debt was cut $1.86 billion, or almost 30 percent, to $4.44 billion as of Sept. 30 from $6.3 billion at the end of 2004, Huntsman said in November.
The stock probably will give back most of last week's gains of $3.55 per share, JP Morgan analyst Jeffrey Zekauskas said Monday in a note to clients. He rates the shares "neutral."
Discussions had been held with a number of potential acquirers or merger partners since a potential buyer made an "expression of interest" late last year, the company said last week. Spokesman Don Olsen declined to comment further, saying Huntsman won't discuss who made offers or how much they offered.
The offers "were not adequate, particularly in light of the risks, uncertainties and extended timing of the proposed transactions," Chairman Huntsman, 68, said in a Sunday statement.
Huntsman shares haven't reflected the full value of the company's differentiated businesses, which include advanced materials, polyurethanes and performance products, Huntsman said. The company will continue to evaluate alternatives to realize the potential of those businesses, he said.
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