While the average American household and the average investor in the Stock Market may remain skeptical and cynical about the American business world, the economic downturn notwithstanding, business continues on. So it is for Huntsman Corporation (NYSE: HUN) who is seeking $13 billion in damages from Credit Suisse Group and Deutsche Bank. According to numerous reports on such networks as CNBC, Huntsman is going after these two banks as reparation for the banks going back on financing for an acquisition of their company.
According to Bloomberg.com, “attorneys for Salt Lake City-based Huntsman told jurors in state court in Conroe Texas today that the company turned down a $25.25 a share offer from a unit of Access Industries Holdings in 2007 to accept a bid of $28 a share from a unit of Apollo Management LLP. Credits Suisse and Deutsche Bank agreed to fund Apollo’s acquisition of Huntsman, the world’s largest maker of epoxy adhesives.”
However, that deal never went through. According to numerous reports both banks balked at the scope of the deal due to growing concern resulting from the US economic slump. This, despite the fact that the banks had already committed to the deal and in spite of the fact that Huntsman turned down another, lower offer to accept the deal that Credit Suisse and Deutsche Bank had agreed on.
While speaking about the case, Huntsman’s lead lawyer Kathy Patrick was quoted as having said “These banks gave Huntsman a commitment letter they never intended to honor.” While it remains to be seen whether or not you’re going to find sympathetic jurors wanting to give away billions of dollars, the fact is that Huntsman has already been successful in recovering money in other suits regarding this deal. Huntsman has already cobbled together over $1 billion from another lawsuit which should set some precedents in the minds of the jurors.
While you may wonder how this affects you, according to the likes of none other than Jim Cramer from CNBC’s Mad Money, a favorable ruling for Huntsman should lead to a substantial uptick on the stock price. While he did qualify his prediction with the fact that the stock price could get slashed in half if they lose, Cramer doesn’t believe that they will. Because of the fact that Huntsman has already won a case for the same matter, Cramer seems to believe that a similar outcome will happen in this pending lawsuit which could run as long as through July.
While not all of us have all kinds of money lying around just invest in a speculative play, it’s still a titillating that could pay off handsomely. If you have a little bit of extra money sitting on the side in your brokerage account you might just want to move it over for a couple weeks to see how this whole thing shakes out.
Huntsman closed the day of trading on Tuesday, June 16, 2009 at $6.59.
CNBC’s MAD MONEY (6/15/09)