Philip Kassin, Access' head of mergers and financing, wrote Chief Financial Officer Alan Bigman in the spring of 2007 saying the idea of paying even $38 a share for Lyondell was causing him to lose sleep.
Bigman agreed and even e-mailed Blavatnik directly.
"I am uncomfortable with the valuation--it's almost $5 billion more than we offered a year ago and over $2 billion more than we were discussing just a few weeks ago," according to a copy of the message included in the lawsuit.
Another Access executive, Ajay Patel, described the deal this way: "We are putting a lot of debt on to the combined entity just because the financial markets will let us. This may not be prudent in the long term."
Bigman responded that he couldn't understand Merrill's rosy projections for the merged company, saying if oil prices rose--which they later did--it would leave the company in financial distress.
Kassin later said he voted against the merger at an Access board meeting, calling the $48 offering price "ludicrous."
The lawsuit portrays Merrill and other investment bankers as aggressively pushing the deal to collect hundreds of millions of dollars in advisory fees.
Blavatnik himself made a quick profit of more than $300 million on the deal.
The creditors' lawsuit paints a vivid picture of the mentality that spawned our global financial crisis. The deal makers were seduced by the siren song of fees and fast profit. The bankers underwrote a merger destined to fail because they planned to foist the dodgy debt on unsuspecting investors, washing their hands of responsibility. So everyone sang a happy tune and ignored ugly reality.
The creditors' lawsuit paints a vivid picture of the mentality that spawned our global financial crisis. The deal makers were seduced by the siren song of fees and fast profit. The bankers underwrote a merger destined to fail because they planned to foist the dodgy debt on unsuspecting investors, washing their hands of responsibility. So everyone sang a happy tune and ignored ugly reality.
Meanwhile, LyondellBasell, its employees and its creditors were left to face the dirge of failure.
loren.steffy@chron.com
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