Having announced that it had signed a merger agreement with Basell AF last week, US chemicals and pigments manufacturer Huntsman Corporation has now reported that it has received a higher offer from Hexion Specialty Chemicals, Inc., an entity owned by an affiliate of Apollo Management, L.P.

The new proposal offers to acquire all of the outstanding common stock of Huntsman for $27.25 per share in cash, compared with the $25.25 agreed under the Basell deal.

Under the terms of the Basell agreement, the deal may be terminated under certain circumstances, including the receipt of a superior proposal, but Basell will be entitled to a $200 million payment. Hexion has agreed to directly fund $100 million of this payment, subject to reimbursement by Huntsman if the transaction with Hexion were not consummated.