Beazer’s Plan to Buy Koppers Runs Into Snag

The $660-million leveraged buyout of Koppers Co.’s chemicals business has apparently hit a snag, putting a hitch in Brian Beazer’s plan to use the proceeds to help finance his $1.8-billion takeover of Koppers.

The British industrialist, who prevailed June 1 in a bitter takeover battle against Koppers’ former management, did not deny the rumors, which surfaced Thursday, nor would he reaffirm a prediction he made Monday that the chemicals buyout would close Aug. 8.

“Discussions at this present time are continuing relating to the chemicals buyout. That is the only comment,” he said.

One executive at Koppers headquarters, who agreed to discuss the matter only if not quoted by name, said managers of the chemicals segment had been told a financial consultant to the deal raised new concerns about the extent of Koppers’ environmental liabilities. That created differences over the agreed purchase price and raised the possibility that the chemicals business might be sold in pieces rather than as an entity, the source said.

Such a change in course could affect the nearly 2,700 Koppers employees who were expected to keep their jobs in the chemicals group.

Beazer, who had the investment firm Shearson Lehman Hutton Inc. as a partner in the takeover, agreed to be responsible for environmental liabilities of the chemicals operations. Koppers also has major interests in construction materials, which Beazer wanted as an addition to his international construction operations.

Gordon Cain, a chemicals buyout specialist who heads the Sterling Group of Houston, was not available to comment on the development. In announcing July 5 that a buyout agreement had been concluded, Koppers said Cain would join managers as a major equity financing partner and would be chairman of the new Koppers Chemical Co.

A Wall Street securities analyst who follows Koppers said he was not surprised by the reports that environmental issues might be causing problems in the deal, although he said he was unaware of the snag.