By the OGJ Online Staff
HOUSTON, Dec. 17 -- Cargill Inc. has sued Lone Star Technologies Inc., alleging breach of agreement to purchase the tubular products division of Cargill's North Star Steel Co.
Lone Star said it has performed all of its obligations and will contest the lawsuit.
It said lack of common-stock financing has prevented it from completing the $430 million acquisition. The acquisition agreement called for common stock financing and debt financing (OGJ Online, Aug. 17, 2001).
Either Cargill Inc., the parent of North Star, or Lone Star could have terminated the agreement Dec. 16, but neither has done so.
A bridge financing commitment for a portion of the purchase price expired Dec. 15.
Rhys Best, Lone Star chairman, president and CEO, said, "After exhaustive efforts, we were not able to complete this acquisition within the time frame contemplated by our agreement with Cargill. As stated ... consummation of the acquisition is subject to completion of financing arrangements. Unfortunately, the disruption in the capital markets following the tragic events of Sept. 11 and the resulting economic downturn have prevented Lone Star from obtaining the financing needed to close this transaction."