Just got off the phone with “sources close to the situation”.
Some note:
– Dow (DOW) will answer the suit by Rohm & Hass (ROH) tomorrow
– They will be looking for the chancellor to issue a “business resolution”.
– Dow is still committed to the transaction
– Are in “active” conversations with several bidders for the previously named “K-Dow” JV with Kuwait. “Several other parties have come to the table” in bidding for the businesses.
– Dividend. Company credit rating is taking priority.
I got the impression that should a “business solution” to the litigation be required, the dividend may be safe but, it an immediate deal consummation is ordered, it is not. Now it should be noted that while Delaware Chancery Court Judge William B. Chandler III set the first day for March 9th and scheduled a trial of about five days, he said in the letter that “I strongly encourage the parties to focus on a business solution to this dispute.”
“The court will promptly rule at the trial’s conclusion,” Chandler added.
On page 24 Chandler said:
One thing that sort of strikes me — not knowing as much about this case as either of you or your colleagues — it strikes me that, A, there is a fundamental business problem here, and it is always my view that business problems are better resolved by business people; and that to the extent that the Court is called upon to resolve a legal issue, the Court will do that, of course, and will do it as promptly as possible. This Court obviously tries to accommodate parties who come and ask for expedited proceedings or accelerated proceedings because of the business necessities that a particular legal question implicates.
So, with that said, and with the hope that even after we resolve this immediate problem of how to go forward and in what manner to go forward, with the hope and trust that you will carry back — and I am sure you will — that the view of the Court is that it would be even better if the parties continue to try to figure out a way to resolve this business problem amongst the business people.
Full Filing:
Chancery Transcript
Anyone else take that to mean neither is going to get all of what they want? I have said it before, Rohm has the most to lose here, should this fail, they’ll not see $78 a share this decade, best they work with Dow.
Now, earnings are released tomorrow am and expect the news to be bad, just like the rest of the manufacturing world. Liveris & Co .will be pelted with questions on the merger, sale, dividend etc. Don’t expect concrete answers, just assurances which, in the current environment will not go very far to assuage investors.
This is one you’ll just have to wait out a few months
Disclosure (“none” means no position):Long DOW, none
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