Hexion Specialty Chemicals wants out of its $10.6bn offer to acquire Huntsman but Huntsman intends to make Hexion stick to the original deal. Columbus-based Hexion - which ranks as the world’s largest maker of thermoset plastics - offered $28 per share to buy Huntsman of Salt Lake City in mid-2007. But Hexion filed suit in chancery court in Delaware on 18 June saying that the capital structure for the deal “is no longer viable because of Huntsman’s increased net debt and its lower-than-expected earnings.” Hexion “does not believe that the banks will provide the debt financing for the merger,” officials said in an 18 June news release. The planned pullout sent Huntsman stock tumbling 40%, to less than $13 per share, in early trading on 19 June. Huntsman countered on 19 June, with officials saying that the speciality chemicals firm “intends to vigorously enforce all of its rights under the merger agreement [with Hexion] and seek to consummate the merger on the agreed terms.” “These actions appear to be a blatant attempt to deprive our shareholders of the benefits of the merger agreement that was agreed to nearly a year ago,” Huntsman President and ceo Peter Huntsman said in a 19 June news release. Huntsman’s financial struggles — including a $172m loss in 2007 and an 85% drop in first quarter profit — qualify as a “material adverse effect” as defined in the merger agreement, according to Hexion officials. “While both Hexion and Huntsman can be successful as separate companies, they cannot now support the debt load that was agreed to at the time the transaction was put together,” Hexion Chairman, president and ceo Craig Morrison said in his firm’s news release. Hexion - which is controlled by New York investment firm Apollo Management - lost $6m in the first quarter of 2008 after posting a full-year loss of $65m in 2007. The firm’s first-quarter sales were up 14% to $1.6bn. Huntsman’s first-quarter sales climbed 13% to $2.5bn, but quarterly profit plunged from almost $47m in 2007 to about $7m this year. Huntsman’s product mix includes polyurethanes and polymer additives such as titanium dioxide.