Meister's Corvex Said To Target Clariant In Bid To Derail Huntsman Merger

Jul 3 2017 | 8:21pm ET

Keith Meister’s activist hedge fund Corvex Management has reportedly taken a stake in Swiss chemicals maker Clariant AG in an attempt to thwart the company’s planned $6.4 billion merger with Texas-based rival Huntsman Corporation. 

The stake is greater than the 3% reporting threshold required by securities regulations, according to a Bloomberg article citing unidentified individuals familiar with the situation. Corvex reportedly intends to push Clariant to explore strategic alternatives to the Huntsman deal, including a potential sale.

Clariant agreed to buy Huntsman in late May in an all-stock transaction that was described at the time as a “merger of equals” that would result in a leading global specialty chemical company with annual sales of more than $13 billion and an enterprise value north of $20 billion. Under the proposed merger terms, Clariant shareholders would own 52% of the new entity in a 1-for-1 swap with their current shares, while Huntsman shareholders would receive 1.2196 shares for every Huntsman share they owned.

The deal was largely billed as a move to increase shareholder value, but has been questioned as lacking in strategic rationale and operational overlap able to generate substantial cost synergies. 

Meister, who founded Corvex in 2011 with $250 million in seed capital from George Soros, was CEO of Icahn Enterprises from 2003 to 2003 and is a protégé of billionaire activist Carl Icahn. The company manages approximately $5.5 billion in mostly equity investments, special situations and distressed securities largely in North America, and recently disclosed a 5.5% stake in global oil and gas company Energen Corporation. 

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