'Two Davids' tread in
father-in-law's footsteps in bid to halt Clariant deal
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[August 09, 2017]
By John Miller
ZURICH (Reuters) - Following a formula
pioneered by their corporate raider father-in-law, two men are stirring
up the chemicals sector with a push to halt Clariant's $20 billion
merger with Huntsman.
Known as the "two Davids", David Winter and David Millstone are married
to Samuel Heyman's daughters and manage the privately held,
multi-billion-dollar business empire he established before he died in
With investor Keith Meister, their 40 North fund is likely to have
already made money on what is now a 10 percent stake in Clariant, with
the Swiss group's shares up 5.6 percent since they came out publicly
against the merger on July 3.
Huntsman's stock is flat since then.
Winter and Millstone have in recent years grown increasingly active with
their 40 North fund as well as their roofing materials business,
Standard Industries, including several billion-dollar takeovers in
Europe in 2016.
Now they are seeking to stir a rebellion among Clariant's shareholders
over a deal they call "value destructive".
The battle is reminiscent of those waged by Heyman 35 years ago when he
fought for control of chemical maker GAF Corp and later Union Carbide
With two-thirds of Clariant shareholders required to approve the merger,
Clariant Chief Executive Hariolf Kottmann has hired Goldman Sachs to
help him fend off the insurgency.
Kottmann, with the backing of a German investor group with a 14 percent
stake, insists no other top investors oppose the Huntsman deal.
Alex Roepers, the 13th-biggest Huntsman shareholder and 20th-biggest
Clariant investor, with a stake worth around $200 million, is in favor
of it going ahead.
"The idea to bring these two together, and then roll up your sleeves and
see what other portfolio moves can be made, makes more sense," Roepers
But Winter and Millstone aim to convince other shareholders that
Clariant can do better.
While they have not publicly offered alternatives, a person familiar
with their talks said one option would be for Clariant to dispose of its
plastics and coatings unit, with $2.6 billion in annual sales, to clear
the way for selling the full company to a strategic investor.
Those could include Germany's Evonik, which two years ago held talks
with buyout group CVC over a potential joint offer for Clariant, before
that fell through.
Kottmann has not ruled out asset disposals, but only after the merger is
[to top of second column]
CEO Hariolf Kottmann (R) of Swiss chemical company Clariant sits
beside Huntsman President and CEO Peter Huntsman as he addresses a
news conference in Zurich, Switzerland May 22, 2017. REUTERS/Arnd
Markus Mayer, a chemicals industry analyst at Baader Helvea who dubs Clariant
the No. 1 takeover target in the global speciality chemicals industries, told
Reuters this week he estimates the merger's chances at just 50-50.
Huntsman says those opposing the merger are pursuing short-term profit through a
break-up of Clariant, in a move similar to when Meister, then a Huntsman
shareholder, pushed the Texas-based company to shed its pigments business in
However, CEO Peter Huntsman, who is slated to become head of the merged
companies, instead combined the pigments business with assets he bought from
Rockwood and spun them off last week through an initial public offering.
"The parties had a clear difference of opinion on what Huntsman's pigments
strategy should be and Peterís view has been completely vindicated," a Huntsman
"The Huntsman/Clariant combination provides even greater potential."
CLOSE AS BROTHERS
Combining a real-estate fortune inherited from his father and savvy business
acumen, Heyman won a $5 billion takeover of chemical maker GAF in 1983 after a
While subsequent hostile bids for Union Carbide and Borg-Warner failed, they
made GAF hundreds of millions of dollars.
And late in his career, Heyman amassed a 10 percent stake in the London Stock
Exchange when Nasdaq was pursuing a merger.
His sons-in-law have picked up where he left off.
Millstone comes from a family of lawyers and spent time at U.S. investment bank
Bear Stearns before taking a role in his father-in-law's businesses.
Winter, like Heyman, is from a wealthy real-estate family and in a 2015 New York
Times interview estimated the clan's property portfolio at "north of $5
They both declined comment on Clariant, but Winter said in the New York Times
interview that he and Millstone "are interchangeable" as they work to grow their
"Having two Davids never hurts. We are as close as brothers," he added.
(This story corrects spelling of name to Winter)
(Reporting by John Miller; editing by Alexander Smith)
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