The lawsuit, filed by Huntsman shareholder John Catechis, seeks class-action status for all stockholders who purchased shares of the chemicals maker from June 26, 2007, through June 18.
Catechis' lawsuit does not specify what damages are being sought.
The lawsuit details developments that began in late June 2007, when Huntsman announced it received an acquisition offer from Basell AF for $25.25 per share. Subsequent to that offer, Huntsman announced it had received a superior merger proposal for $28 per share from Hexion Specialty Chemicals, which led to it terminating its agreement with Basell at a cost of $200 million.
Those merger announcements caused Huntsman's shares to rise and trade at "artificially inflated prices," the lawsuit said. It goes on to contend that company insiders later sold more than 57 million shares of the company's stock for more than $1.3 billion.
All the while, according to the lawsuit, Huntsman Corp. and three of its top executives withheld important information, such as the company's decreased earnings potential and increased debt, which ultimately led to Hexion attempting to terminate its merger agreement.
Huntsman shares closed up 9 cents Wednesday, at $14.19.
"We don't believe there is any merit to this lawsuit," said Russ Stolle, a spokesman for Huntsman Corp., which operates out of offices in Salt Lake City and The Woodlands, Texas.
A unit of the New York-based Apollo Management LP, Hexion sued Huntsman Corp. two months ago in a Delaware court seeking to terminate its $10.6 billion merger agreement. It contended that since the merger pact was inked a year ago, Huntsman's financial prospects had deteriorated to the point that the combined company would be insolvent if the deal were completed.
Catechis' proposed class-action lawsuit isn't the only litigation seeking to represent shareholders who purchased Huntsman stock in light of its planned acquisition by Hexion.
Huntsman shareholder Sandra Lifschitz, in a lawsuit filed in June in federal court in New York, contends that Hexion engaged in a scheme to deceive the investing public by misrepresenting its intentions to acquire the Utah-based chemicals maker.
She, too, argues that stockholders purchased shares of Huntsman at artificially inflated prices but blames Hexion for being disingenuous in its representations and engaging in a scheme to deceive the investing public. Her lawsuit seeks to represent shareholders who purchased Huntsman shares between May 14 and June 18.
In response, Hexion's spokesman Peter Loscocco said the litigation "has no merit, and we will defend against it vigorously."
Huntsman Corp., which continues to dispute Hexion's view of its financial future, has responded by suing Apollo Management partners Leon Black and Joshua Harris in a Texas court for more than $3 billion.
The Hexion lawsuit that seeks to end its merger agreement is scheduled for trial Sept. 8. Huntsman Corp. had requested an early date for the trial so a decision could be handed down before Oct. 2, when the merger agreement is set to expire.
steve@sltrib.com
