Huntsman stock up after report hints of sale
Deals • Company won’t confirm whether Bank of America has been brought on board.
Published: April 3, 2012 11:11AM
Updated: April 4, 2012 12:11AM
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Rick Egan | Tribune file photo The Huntsman Chemical Plant in Port Neches, Texas.

Huntsman Corp., the chemicals conglomerate based in Salt Lake City and The Woodlands, Texas, is attracting investor attention after DealReporter said it hired Bank of America Corp. to explore a potential sale of the company.

Company shares rose 1 percent on Tuesday after Monday’s gain of 7 percent, which was the biggest advance in the company’s stocks in more than a month. Huntsman shares closed Tuesday at $15.11, up 12 cents for the day.

DealReporter, a news website that is part of The Financial Times Group, cited two people in the industry whom it didn’t identify.

Brad Hart, a spokesman for Huntsman, would neither confirm nor deny the report when contacted by The Salt Lake Tribune, saying only“no comment.”

Founder Jon M. Huntsman said in a March 8 investor presentation that he would pursue a sale of part or all of the company “at the right price” because it is being undervalued by the market.

Huntsman Corp. is worth at least $19 a share based on a multiple of six times normalized earnings before interest, taxes, depreciation and amortization, the company’s chairman said.

He added that the company has no interest in selling at the current market value.

In early February, Bloomberg News reported that Huntsman and Celanese Corp. were turning into the cheapest takeover targets in the U.S. chemicals industry as signs grew that a strengthening economy would boost demand for paint ingredients and building insulation.

At the time, Huntsman was trading at 6.7 times estimated 2012 earnings, the lowest valuation among 29 U.S. basic and diversified chemicals companies with market values of more than $1 billion, according to data compiled by Bloomberg. Celanese, the world’s biggest producer of acetic acid, was the second-cheapest, at 10.1 times.

With U.S. economic growth accelerating at the fastest pace in 18 months and confidence among U.S. homebuilders climbing to a four-year high, analysts quoted by Bloomberg projected that Huntsman and Celanese would both post record sales this year.

In its most recent earnings report, Huntsman said revenue reached $11.2 billion, up 21 percent in fiscal 2011, compared with its prior year. Net income was $247 million, or $1.02 per share. A year earlier, Huntsman reported net income of $27 million, or 11 cents per share.

For the fourth quarter of 2011, Huntsman said revenue rose 9 percent, to $2.6 billion. Net income was $105 million, or 44 cent per share, compared with $30 million, or 12 cents per share, recorded in the final quarter of fiscal 2010.

Huntsman Corp. at a glance

Worldwide operations • 75 facilities in 30 countries

Administrative headquarters • Salt Lake City

Utah employees • 60

Corporate headquarters • The Woodlands, Texas

Employees worldwide • 12,000+

Annual revenue • $11.2 billion in 2011

Net income • $247 million in 2011