PHILADELPHIA, Aug. 14, 2008 (PRIME NEWSWIRE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the District of Utah, on behalf of purchasers of the securities of Huntsman Corporation ("Huntsman" or the "Company") (NYSE:HUN) between June 26, 2007 through June 18, 2008, inclusive (the "Class Period").
Huntsman markets differentiated chemicals and pigments products. In May 2007, the Company decided to put itself up for sale and contacted potential buyers. On June 26, 2007, the Company announced that it had agreed to be acquired by Basell AF ("Basell") for $25.25 per share. Following this announcement, on July 3, 2007, the Company announced that it received a merger proposal from Hexion Specialty Chemicals, Inc. ("Hexion"), an affiliate of private equity firm Apollo Management, L.P., for $27.25 per share. The Company finally announced on July 12, 2007, that it has agreed to be acquired by Hexion for $28.00 per share.
The Complaint alleges that Huntsman and certain of its officers and directors violated the Securities Exchange Act of 1934 by disseminating false and misleading information which resulted in the artificial inflation of the Company's stock price. Specifically, it is alleged that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Hexion merger proposal included a financing condition, and the debt financing of the acquisition was not fully committed; (2) that the Company had significantly understated its future net debt estimate prior to entering the Merger Agreement, and its net debt had dramatically increased since such time; (3) that the Company had significantly overstated its future net earnings prior to entering the Merger Agreement, and its future net earnings had dramatically decreased since such time; (4) that the Company's Pigment, Textile Effects and Performance Products segments were significantly underperforming relative to estimates and expectations, and in a disproportionate manner compared to other companies engaged in the chemical business; (5) that as a result, the equity value of Huntsman had significantly declined throughout the Class Period to the point where Hexion would be unable to obtain a solvency opinion necessary to complete the merger; (6) that the increase in total debt and decrease in earnings had caused the Company's financial health to significantly deteriorate and to trigger a material adverse effect ("MAE") in the Merger Agreement; (7) that due to the MAE, combined with the fact that Hexion could not secure a solvency opinion necessary for the merger, Hexion would be unable to complete the merger with Huntsman; (8) that the Company lacked adequate internal and financial controls; and (9) that, as a result of the foregoing, the Company's statements about its financial well-being and business prospects, including the consummation of the merger with Hexion, were lacking in any reasonable basis when made.
Following the Company's merger announcements, and the announcement of Hexion's proposal, the Company's shares significantly increased in value. Taking advantage of the increase in stock price after Huntsman's announcement that it had signed a definitive Merger Agreement with Hexion, Company insiders sold 57,082,420 shares of the Company's stock for gross proceeds of over $1.3 billion.
On June 19, 2008, the Company stunned investors when it announced that Hexion had filed a lawsuit against Huntsman seeking to terminate the Merger Agreement alleging that three of Huntsman's five business segments had significantly underperformed relative to expectations, estimations and projections. Citing the combination of Huntsman's decreased earnings potential, as well as its significant increase in net debt, Hexion disclosed that it was unable to secure a financing Commitment Letter or solvency opinion -- both necessary for the merger to successfully close. Huntsman's deteriorating financial health -- given the dramatic increase in net debt and decline in earnings -- meant that the company had suffered a MAE, and in all likelihood the merger will not be completed. On this news, the Company's shares fell $8.00 per share, or 38.35 percent, to close on June 19, 2008 at $12.86 per share, on unusually heavy trading volume.
If you purchased Huntsman securities during the Class Period, you may, no later than September 15, 2008, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, which acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.
If you have sustained substantial losses in Huntsman securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to join this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or e-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The Firm is active in major litigation pending in federal and state courts throughout the United States. The Firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.