(DR) - Allied World Assurance (AWH) October 14, 2008 (3:25p) - Delaware DOI Status

The Delaware DOI hearing officers are currently in the process of finalizing their final report and recommendation for the DOI Commissioner. Upon receipt of the this documentation, the Commissioner is expected to finalize the decision "almost immediately" according to a DOI official. However, there is no specific target date for a decision as of this entry.

It is possible that the DOI approval will be granted before tomorrow's DR shareholder meeting, according to the DOI official. As this has been the trend with state insurance regulators in recent years, it would not be surprising if this does indeed occur.

If the approval is delayed beyond tomorrow, there is virtually no expectation that it will slip beyond this month. Any delay is likely to be matter of a few days, rather than a week or more in this case.

*Alpharma Inc. (ALO) - King Pharmaceuticals, Inc. (KG)

October 14, 2008 (12:05p) - Additional Analysis (HSR)

Follow-up research into the second request issued for this proposed combination indicates that the only possible area of interest is in pain management products, where ALO has become the dominant player in the transdermal patch market segment via its "Flector". Flector is an NSAID product that provides rapid, short-term pain relief through direct application.

KG's pain relief products, on the other hand, are opioids which essentially provide extended relief via injections and/or ingestion. KG's primary pain product is Avinza, described by the company as follows:

"An extended-release formulation of morphine indicated as a once-daily treatment for moderate to severe pain in patients who require continuous opioid therapy for an extended period of time."

KG also develops and markets "Remoxytm" through a licensing agreement with Pain Therapeutics. Remoxytm is also an opioid, as opposed to an NSAID, and therefore does not compete directly with ALO's Flector.

Thus, the second request appears to originate from an interest in the broader pain management market, which is somewhat perplexing given the highly competitive nature of this market and the DOJ/FTC's established lack of concern for deals involving broad market overlaps. The following chart provides a fairly recent example of the pain management market's competitiveness:



Naturally, ALO's pain patch would fall in the "others" category above, as would KG's pain relief products. Given the number of major competitors in this industry, there is clearly no chance that a ALO-KG combination will adversely impact the pain management market.

Given the information available at this time, the second request here is viewed as purely educational in nature, even though this has rarely occurred over the last several years, generally speaking. The pharmaceutical industry has been subject to several of these types of second requests, so this appears to fall in line with the DOJ/FTC's habits in this industry.

Nevertheless, barring contrary information, there is absolutely no reason to anticipate a long HSR review process in this case, with or without a formal merger agreement. The HSR clearance will almost certainly be obtained, unconditionally, before the end of this year.

DRS Technologies, Inc. (DRS) - Finmeccanica

October 14, 2008 (9:50a) - CFIUS Status

As of this update, there has been absolutely no indication of a CFIUS decision in this case.

It will be noted that a CFIUS decision at this stage of an Exon-Florio review must be referred to the White House for final consent. This process is technically two weeks, but often concludes in far less time, and occasionally exceeds this period. Also, the CFIUS is in no way obligated, nor is it inclined to, publicly reveal its recommendation to the White House. In other words, it is possible that the Exon-Florio outcome may not be known for several more days. However, in the majority of cases, the companies are informed of the CFIUS recommendation and this is routinely disclosed and/or leaked by the companies.

That being said, there continues to be a fairly high expectation of Exon-Florio approval without additional major delays. This expectation is, again, tentative, and is necessarily tempered by the fact that DRS' products/services are among the most sensitive, with respect to national security, and any recent major merger transaction.

If advanced reports are to be believed -- and in this case the information coming from the CFIUS process appears legitimate -- the companies have agreed to certain conditions which will facilitate Exon-Florio consent. Assuming the companies have indeed agreed to CFIUS conditions, notice of this final approval will very likely be made later today or before the end of this week.

Huntsman Corporation (HUN) - Hexion Specialty Chemicals

October 14, 2008 (9:05a) - HUN Temporary Restraining Order Granted

Not surprisingly, the Montgomery County Texas District Court granted a temporary restraining order in HUN's favor against Credit Suisse and Deutsche Bank in association with their financing commitments in this transaction.

A HUN press release states the following:

"Judge Edwards granted Huntsman's request that the TRO, which had been set to expire on October 8, 2008, be replaced with a temporary injunction that will not expire prior to November 1, 2008, unless the merger is closed before such date.

"Judge Edwards also consolidated Huntsman's claims against the Banks with Huntsman's previously filed claims against Apollo Management, L.P., Leon Black and Joshua Harris, and has set a trial date of February 9, 2009, to begin a jury trial on all of Huntsman's claims for damages. Huntsman seeks more than $3 billion in actual damages, plus exemplary damages, attorneys' fees and interest."

At this point, and under the current legal circumstances, it is extremely difficult to conceive of this situation continuing unresolved into February of next year. It must be assumed that the entities will reach some sort of mutually agreeable settlement -- presumably highly beneficial to HUN -- well before this case is heard in the Texas courts.

If that is indeed the course of this transaction, it must therefore also be assumed that the entities at this time are at least engaged in preliminary negotiations with respect to a final termination settlement or revised deal. Of the two, the former continues to be perceived as the more likely, although in this case there is clearly no definite foreseeable outcome. It can only be speculated, once again, that any resolution to this situation must weigh heavily in favor of HUN, both in a short- and long-term context.

The current expectation is that the companies will agree to some form of termination settlement before the end of this year. This is, obviously, a tentative projection.