Apollo Management, the giant private-equity firm founded by billionaire Leon Black, is poised to prevail over the world’s seventh-richest man in the battle for bankrupt Dutch chemical giant LyondellBasell, according to people familiar with the matter.
Three Lyondell creditors told The Post that Indian billionaire Mukesh Ambani’s $14.5 billion bid for Lyondell, the world’s third-largest chemical company, is expected to be rejected by a creditor group led by Apollo, setting the stage for Apollo to merge Lyondell with its Hexion Specialty Chemicals operation.
Lyondell is expected to file a reorganization plan today with the US bankruptcy court in Manhattan that will transfer ownership of the company to the creditors. A hearing on the plan is scheduled for next Monday.
Apollo declined to comment.
Ambani, whose reported net worth is around $32 billion, has been trying to buy Lyondell out of bankruptcy and combine it with his Reliance Industries.
Last month, Ambani sweetened an earlier offer by $1 billion to $14.5 billion, but Lyondell creditors still think his bid is too low. And while Ambani still has time to raise his offer, sources doubt he will.
“Reliance is a value buyer,” said Telly Zachariades, partner of the Valence Group investment bank. “He’s not the kind of person to get caught up in deal frenzy.”
Apollo, which bought debt in Lyondell at a discount, “knows [Lyondell] is really valuable and Reliance is making a mistake by not offering more,” one creditor said. A second creditor said the offer from Reliance values $8 billion of the most senior Lyondell debt at about $2 billion less than where it’s trading.
“If [Reliance] gets close to a number where the debt is trading then it gets interesting,” this creditor said.
In addition to Apollo, Lyondell’s group of creditors includes Russian billionaire Leonard Blavatnik.