White Tale Holdings – a Cayman Island-based partnership between hedge funds Corvex and 40 North – wrote a letter to Clariant's board to explain its opposition.
"Unfortunately, we remain convinced, and increasingly so, that the proposed merger is detrimental to Clariant shareholders," the investor wrote in a letter published Tuesday. "It both significantly destroys existing Clariant shareholder value and prevents Clariant from pursuing multiple alternative and immediate opportunities to unlock value for its shareholders."
White Tale Holdings said it owns "approximately" 50.1 million shares. If Clariant's board doesn't explore "all strategic alternatives," the investor said it "will be forced" to vote against the merger.
Clariant issued a press release rejecting statements made by White Tale Holdings.
The company said "the terms of the proposed merger do not undervalue Clariant's shares" and called it a "merger of equals."
"The exchange ratio has been agreed on the basis of the respective share prices prevailing at the time of the announcement," the release states.
Clariant shareholders would end up owning 52 percent of the combined company, CNN Money reported.
Clariant, in the release, said "the proposed merger offers substantial value creation – over $3.5 billion – to both sets of shareholders."
In its letter, White Tale Holdings said Clariant's board "plans to cede operational control of one of the industry's most prized specialty chemicals companies for no control premium to Huntsman's management."
Per Clariant's press release, in the new company, CEO Hariolf Kottmann would become chairman and be succeeded in his previous role by Huntsman President and CEO Peter Huntsman.
Patrick Jany would become CFO of the new company, Clariant added.
Photo courtesy clariant.com