(The story "=Dow, Rohm & Hass Confirm Talks; Size Of Deal
Loan Slashed," published at 12:40 p.m. EST, incorrectly said in the
second paragraph that the size of the term loan was slashed to $500
million. The correct version follows.)
Dow Chemical Co. (DOW) and Rohm & Haas Co. (ROH) confirmed
Friday they are in discussions about their proposed $15.3 billion
merger and the pending lawsuit related to the deal.
Shares of Dow, which have been pummeled in recent months on
concerns about the company possibly being forced by court order to
close the deal, were recently up 15% at $7.43. Rohm gained 15% to
$62.31, getting the stock close to Dow's $72 offer price. Dow's
shares have lost half their value so far this year.
Dow and Rohm & Haas are locked in a court battle after Dow
said in January it wouldn't close the acquisition on time. Dow has
said it was still interested in completing the debt-fueled deal but
that doing so now without firm long-term financing in place would
put the combined company's future in question. The trial is slated
to start Monday.
The two companies said they wouldn't comment further on the
matter at this time.
Dow slashed its quarterly dividend 64% to 15 cents a share last
month, confirming market expectations that the company would need
to do so amid the slump in chemical demand and would need to save
money ahead of the deal.
Standard & Poor's Ratings Services cut its short-term
ratings on Dow earlier Friday on higher potential for near-term
weakness because of the takeover.
The industry's woes and continuing credit crunch threw a wrench
into Rohm & Haas' deal to be acquired by Dow, following the
Kuwaiti government's withdrawal from a planned $17.4 billion joint
venture with Dow. Dow was left with a $9 billion shortfall due to
the joint venture's collapse.
Separately, Dow said it has reached an agreement with lenders
that lowers the size of a term loan taken out to partially finance
the purchase by $500 million to $12.5 billion.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com
(Brian Kalish contributed to this story)