To terminate its $6.5 billion deal to buy Huntsman, Apollo Management’s Hexion Specialty Chemicals had to cough up $1 billion in fees and charges. This follows the long-awaited collapse of the private equity bid for Canada’s BCE last week, which cost buyers C$1.2 billion in break-up charges.

Hexion agreed to buy Huntsman in July 2007. The deal faltered amid the credit crisis. Apollo tried to walk away, citing insolvency concerns about the combined company.

But with a hefty break-up fee in its pocket - almost as much as its diminished $1.4 billion market cap - Huntsman is looking to settle what could be an even bigger score.

Huntsman sued twice over the deal - once in Delaware to force Hexion to go through with it, and once in Texas alleging that Hexion’s bid scared off another potential suitor, Basell.

The Texas suit could feature a big pay-off. Given its record so far is 1-0, and the Lone Star state is known for its plaintiff-friendly juries, Huntsman can be forgiven for looking to the courts for a little confidence. It isn’t getting much from the market. Huntsman shares sank 17 percent in premarket trade Monday.

Deals of the day:

* ArcelorMittal, the world’s largest steelmaker, said it sold part of its stake in German plate mill Dillinger Huette for 777 million euros ($1.03 billion).

* Energy services firm Hunting said it completed the delayed sale of its Canadian oil and gas division for C$1.26 billions ($1 billion) and would step up its search for acquisitions with the proceeds.

* Macquarie Group, Australia’s biggest investment bank, plans to set up a joint venture with China’s Hengtai Securities in a move aimed at boosting its business in the country’s capital markets, a source said.

* Fidelity Investments has put its Indian captive technology offshore unit up for sale and possible suitors include Indian and global outsourcing firms, the Economic Times reported citing two sources involved in the deal.

* British defense company Ultra Electronics has bought Siemens Radmon, a unit of the German engineering group that monitors radiation for the Royal Navy’s nuclear submarine fleet, for about 5 million pounds ($7.5 million).

* Vishal Retail is not considering any stake sale, a senior official said, denying a newspaper report that the discount retailer was in talks to bring in investors.

* Finnish telecom software firm Tecnomen Oyj said it had agreed to buy 96.6 percent of smaller Indian rival Lifetree Convergence Ltd. for 33.2 million euros ($44 million) in cash and shares.

* Seismic survey group CGGVeritas offered to buy all remaining shares in Wavefield Inseis after a bid for its Norwegian rival won acceptance from shareholders with 69.7 percent of stock.

* Sinopec Yizheng Chemical Fibre confirmed it was in talks with UNIFI Asia Holdings about buying a 50 percent stake in Yihua Unifi Fibre Industry Co Ltd.

* Mega Financial, Taiwan’s No.2 state-controlled financial holding firm, is considering reviving its plan to acquire smaller rival Taiwan Business Bank, a finance ministry official said.

* Insurance firms Prudential Financial and MetLife have submitted separate bid proposals for South Korean insurer Kumho Life Insurance, Kumho’s parent group said.

Hexion’s weak quarterly results are going to hurt the chemical company and its private equity owner in more ways than one.

It could take away the punch in their argument against Huntsman, the company that they once wanted to buy.

Hexion and its parent Apollo Management agreed to buy Huntsman for $6.5 billion a year ago, but the deal has been in jeopardy since June, when Apollo and Hexion filed suit against Huntsman seeking to limit their liability in the event that their proposed buyout falls apart.

Apollo Management and Hexion are hinging their argument on an exit clause, which could allow them to walk away from the deal if Huntsman’s business suffers a materially adverse change.

They were quick to point out a month ago that Huntsman’s 19 percent decline in second-quarter operating profit was proof it had.

Now, Hexion has posted a 30 percent decline in operating profits, after excluding a merger related write-off.

Given that the two are in the same industry, it’s raising the question of who has really suffered a material adverse change: Hexion or Huntsman?

Hexion’s results could severely weaken their argument as the so-called MAC clause is typically invoked if a company has been hurt disproportionally to its peers, and Huntsman in this case has actually done better.

The case goes to trial next month, and this might mean Hexion and its parent may have some sleepless nights ahead.

Chemical maker Huntsman Corp’s second-quarter earnings have triggered a new round of sparring with its disgruntled suitor, Hexion Specialty Chemicals.

Hexion, a unit of Apollo Management, jumped on Huntsman’ssecond quarterresults, saying they showed that a material adverse change had occurred in Huntsman’s financial condition. Hexion has claimed the $6.5 billion purchase of chemicals maker Huntsman is no longer feasible and the combined company would be insolvent. The two companies have already filed lawsuits against each other.

Hexion said Huntsman’s EBITDA (earnings before interest, taxes, depreciation and amortization) had dropped 19 percent from prior year and its net debt — adjusted for asset sales — was more than 25 percent higher than a year ago.

“These results further demonstrate that Huntsman has suffered a material adverse effect which is the primary reason why the combined company would be insolvent if the transaction were to be completed based on the agreed capital structure,” Hexion said. “Huntsman has provided no information to support its assertion that the combined company would be solvent.”

For its part, Huntsman remained upbeat and said it had been “encouraged by the recent moderation in crude oil and natural gas prices” and it expected adjusted EBITDA in the second half of the year to be stronger than both the first half of this year and the second half of 2007.

Huntsman Chief Executive Peter Huntsman said he hopes litigation with Hexion will be resolved by mid-September, after an expedited hearing. The trial is scheduled to begin on September 8.

Stay tuned.