Utah Magnate, GE Unit May Join in Bid for Aristech

Utah chemical magnate Jon Huntsman and a General Electric Co. division said Friday that they are attempting to form a 50-50 joint venture that could acquire Aristech Chemical Corp. for more than $899 million.

Huntsman Holdings Corp. and GE Plastics of Pittsfield, Mass., said the proposal could enable Huntsman to boost his offer for Aristech to at least $26 a share from $25, according to a letter that the Salt Lake City businessman mailed to Aristech board member R. S. Evans.

Aristech spokesman David Higie declined to comment Friday.

Huntsman is in a bidding war for Aristech with Mitsubishi Corp. of Japan and Aristech’s senior management, which last week offered $26 a share. The senior management group is led by Aristech Chairman Thomas Marshall.

Aristech has about 32 million shares outstanding, or 34.6 million when fully diluted. Aristech stock dropped 12.5 cents to $25.125 in New York Stock Exchange trading on Friday

Huntsman’s $25-a-share offer, worth about $865 million, was rejected in November.

Aristech’s board in effect rejected the Mitsubishi-management bid on Wednesday when it announced that it would seek bids from buyers willing to pay more than $26 a share. The board set a bidding deadline for 5 p.m. Monday.

In his letter, Huntsman asked Aristech to extend the deadline until Feb. 20 to give him more time to review Aristech’s financial condition and form the joint venture.

“Unfortunately, the 5 p.m. Jan. 29 deadline for the submission of bids, as set forth in your Jan. 24 letter to me, will not afford us an adequate opportunity to conduct the necessary review,” Huntsman wrote.

“In view of Mitsubishi Corp.’s and Aristech management’s lengthy period to conduct a complete review of Aristech, fairness dictates that we be afforded a reasonable due diligence review period,” the letter said.

Huntsman has signed an agreement not to accumulate additional Aristech stock unless he offers to buy all outstanding stock for $25 per share or more. Huntsman currently owns 8.7% of the company’s stock, according to Huntsman spokesman Joel Frank.

In Securities and Exchange Commission documents, Huntsman said he has signed a confidentiality agreement in return for receiving confidential financial data about the company.

Much of Aristech’s holdings are former USX Chemical Corp. properties. The company employs about 1,800 people at 10 plants in eight states.