NEWS OF THE W EEK
HUNTSMAN PUSHES FOR HEXION DEAL HU NTS M A N
MERGER: Company lines up $500 million in cash, but Hexion scoffs
H
UNTSMAN CORP. shareholders have made a last-
ditch effort to salvage Hexion Specialty Chemical’s $10.6 billion purchase of their company, but Hexion is calling the financing offer “inadequate.” Major Huntsman shareholders, including MatlinPatterson Global Advisors, Citadel Investment Group, the hedge funds led by D. E. Shaw, and the Huntsman family, sent a letter to Hexion on Aug. 28 offering more than $500 million to help finance the transaction. The offer comes with “contingent value rights,” which means that the additional funds have to be paid back only if Hexion earns a 20% annual rate of return on capital after the deal. The shareholders stand to see their Huntsman stock increase from about $13.00 per share today to Hexion’s agreed price of $28.00 per share should the deal be completed. “From our perspective as equity investors, we believe the main issue at hand is your expected rate of return to Hexion stockholders after giving effect to the merger,”
HEX ION
Huntsman
Morrison
METHANOBACTIN REDUX BIOCHEMISTRY: Revised structure reported for copper-binding peptide
O O
O N –S
CH3 CH2 CH CH3
Cu+
S– N O
O
The revised structure of the copper-binding portion of methanobactin contains oxygen (red) instead of nitrogen and a CH2 group (green) instead of an oxygen atom.
U
SING NUCLEAR magnetic resonance spec-
troscopy and other methods, chemists have detected an error in, and have revised, the published structure of methanobactin, a copper-binding peptide used by methane-metabolizing bacteria (J. Am. Chem. Soc., DOI: 10.1021/ja804747d). The new structure represents a significant finding because researchers are studying the methanotrophic bacteria that produce the peptide for their ability to remove methane, a greenhouse gas, from the atmosphere. The bacteria use methanobactin to scavenge copper for use by particulate methane mono-oxygenase (pMMO), the enzyme that catalyzes the oxidation of methane to methanol. The first report of the complete structure for methanobactin described it as a peptide with seven amino acids and two hydroxyimidazolate rings (C&EN, Sept. 13, 2004, page 24). Now, a team led by Warren H. Gallagher of the University of Wisconsin, Eau Claire, reports that methanobactin contains oxazolone rings instead of hydroxyimidazolates WWW.C E N- ONLI NE .ORG
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the parties write in their letter. Huntsman said in a statement it is “gratified by the confidence in the merged company expressed in this shareholder initiative.” In its own statement Hexion says the offer doesn’t go far enough in addressing its reasons for wanting to back out. “We are not seeking to renegotiate this transaction,” the firm says. “We are seeking to terminate it.” Hexion has been looking to part ways with Huntsman since it filed a suit in a Delaware court in June seeking to scuttle the deal (C&EN, June 23, page 8). In court filings and letters by Hexion CEO Craig O. Morrison to Huntsman Corp. CEO Peter R. Huntsman, the company has been arguing that the combined company would be insolvent and that its current financing is insufficient to close the transaction. Hexion has maintained that alternative financing is needed to proceed because of poor performance in Huntsman’s titanium dioxide, textile chemicals, and performance chemicals businesses since the merger agreement was signed in July 2007. The resulting increase in debt, the firm says, created a gap between what the banks have offered and the financing the merger would need. Huntsman has suggested additional financing to supplement already-committed bank loans. Hexion rebuts that such an arrangement is not called for in the merger agreement. The trial is set to begin later this week.—ALEX TULLO
and a 3-methylbutanoyl instead of an isopropyl ester. David W. Graham, a professor of environmental engineering at the University of Newcastle, in England, and the leader of the team that originally reported the structure of methanobactin, says, “I had never been completely confident that we had the structure 100% correct because some of the elements were so unusual.” Gallagher and coworkers figured out something was amiss when they started looking at methanobactin with NMR spectroscopy. “The NMR pattern for one part of the molecule didn’t match the published structure at all,” Gallagher says. Simply swapping an isobutyl group for the isopropyl group would throw off the molecular weight, so the team started digging into the rest of the molecule for other possible errors. They realized that switching one nitrogen in each of the two hydroxyimidazolate rings to oxygen would balance the mass change. Methanobactin “is the founding member of what I think is going to be a large and diverse family of copper chelators, so it is critical that we know its exact structure,” says Amy C. Rosenzweig, a biochemistry professor at Northwestern University. “The newly reported oxazolone rings provide some clues into methanobactin biosynthesis.” The revisions suggest possible pathways for synthesizing methanobactin. “The oxazolones we’re proposing are closely related to oxazolines,” Gallagher says. “The chemistry of how they might be formed from amino acids is much more straightforward.”—CELIA ARNAUD
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