THE LONDON TIMES: Oil giants train their sights on Huntsman stock market debut: “Shell is in talks with several potential buyers for Basell, the oil company’s joint venture with BASF, the German chemical conglomerate. A business with a history of losses…” (ShellNews.net) 7 Feb 05
By Carl Mortished, International Business Editor
February 07, 2005
SHELL and BP will this week have their eyes on Jon Huntsman, the American philanthropist, who is writing the final chapter of his rags-to-riches story when he takes his family chemical business to the stock market.
The public offering of $1.3 billion (£690 million) in Huntsman common stock will complete the tale of a poor Mormon boy from Utah who became rich from plastics and was thanked by the Pope for his generosity to Catholic charities. Shell and BP are both selling big parcels of petrochemical assets and are keen to know how investors will value Huntsman at its stock market debut.
Huntsman made its name with the McDonald’s “clamshell” packaging, but today is a global producer of commodity chemicals and last year secured a £17 million grant from the British Government to build on Teesside the world’s biggest producer of low-density polyethylene, used to make plastic bags.
Shell is in talks with several potential buyers for Basell, the oil company’s joint venture with BASF, the German chemical conglomerate. A business with a history of losses, Basell is a plastics juggernaut, global leader in polypropylene and top dog in Europe for polyethylene. Shell and its German partner lost patience with the business in July last year and, hoping to profit from a sudden upturn in bulk chemical prices, agreed to sell Basell.
Meanwhile, BP is preparing to spin off its polyolefins business in a stock market flotation and the market is getting spooked about the prospects of finding enough investors for a slew of independent bulk chemical manufacturers. Shell is believed to be in talks with three buyers — Ineos Chlor, National Petrochemical Company of Iran and the Indian business Haldia Petrochemicals.
Private equity firms appear to have been left by the wayside in the Basell sale in favour of emerging Asian chemical investors, a possible indication that European and American investors are less bullish about the sector. Blackstone last month saw a trimming of its profits from the initial public offering of Celanese. The offer price of the chemical business, acquired ten months ago, was cut from $19-$21 a share to $16 when investors dug in their heels.