Apollo puts up $540M to grease Huntsman buyout

Hexion Specialty Chemicals said Thursday it has received a $540 million pledge to help it close its fiercely contested takeover of Huntsman Corp.

Hexion parent Apollo Management LP offered the capital infusion with banks hesitant to back mergers and acquisitions amid a global slowdown.

Hexion tried to walk away from the $6.5 billion takeover agreed to last summer, citing Huntsman's deteriorating finances.

A Delaware court sided with Huntsman last month, saying that Columbus, Ohio-based Hexion had "knowingly and intentionally" violated several of its covenants under the deal.

The judge ordered Hexion to rework a financing package if necessary to complete the acquisition.

Hexion had said the combined companies couldn't survive on heavy debt financing, and it doubted Deutsche Bank AG and Credit Suisse Group AG would provide financing because of Huntsman's deterioration.

Huntsman sued the banks in September, charging they had interfered in the deal.

Apollo, which also owns stakes in Norwegian Cruise Lines and Linens 'n Things, said it will waive its contractual fee and suspend monitoring fees for three years, provided the deal goes through.

Shares of Salt Lake City-based Huntsman soared 28 percent, or $2.56, to end at $11.64 Thursday.

"We've said all along, and continue to believe, the combined entity will be solvent," Huntsman spokesman Russ Stolle said.

Hexion said it is "proceeding expeditiously" to close the deal and is in ongoing discussions with Huntsman regarding a wide range of matters relating to the closing.

The European Union and U.S. Federal Trade Commission signed off on the deal last week.

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