Dow may delay Rohm and Haas deal to raise new cash: FT report
by Joseph N. DiStefano, Posted: January 7, 2009
"Dow Chemical is prepared to miss next week's deadline to seal the $15 billion takeover of Rohm and Haas in an effort to raise enough cash to complete the deal without taking on too much debt" or cancelling its dividend, reports the Financial Times here.
If the deal is late, Dow could pay Center City-based Rohm and Haas $100 million a month under an agreement last summer. $100 million "is not a huge amount of money," Dow CEO Andrew Liveris told FT. "It will not be a big deal."
"Dow said yesterday it was suing Kuwait's state-owned oil company for its surprise decision 10 days ago to pull out of a joint venture for the US company's plastics business," FT added. Dow wanted to use $9 billion of the $13 billion Kuwait investment to reduce its finance costs for the takeover. Meanwhile, Dow is looking for investors to replace the Kuwaitis. "News of our demise has been greatly exaggerated," Liveris told FT. "We will have no trouble finding a new date for the dance."
Liveris wouldn't comment whether Dow will try to cut the price below the negotiated $78 a share. Said FT, "One person close to Rohm & Haas, whose shares traded at about $60 yesterday, said that was unlikely because the July agreement gave Dow little or no leeway to change or cancel the deal." Dow says it would operate Rohm and Haas as a separate division, but the merger would likely mean job cuts. Rohm and Haas employs 3,100 in Philadelphia and its suburbs.