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. Last Updated: 07/27/2016

Blavatnik Gets Rights to Buy U.S. Stake

Billionaire investor Leonard Blavatnik signed an agreement giving him the right to buy 8.3 percent of Lyondell Chemical, driving the company's shares up as much as 15 percent on Friday on takeover speculation.

Blavatnik's AI Chemical Investments made a forward contract agreement with Merrill Lynch, giving the company the right to buy just under 21 million shares of Lyondell for just over $674 million, or $32.11 per share, according to a regulatory filing Friday.

Lyondell shares soared to $38.23 -- an all-time high -- in early trading before giving up some of those gains.

"Mr. Blavatnik will continue to evaluate his right to acquire a stake in Lyondell. Any future actions in regard to any investment would depend on many factors, including developments in the petrochemical industry, Lyondell and general market conditions," a spokesman for AI Chemical said.

The spokesman described the stake as being "strategic."

Blavatnik is the founder of Access Industries, a privately held, U.S.-based industrial group that counts among its investments plastics company Basell Holdings, TNK-BP, aluminum producer United Company RusAl and Warner Music Group. AI Chemical is a newly formed unit of Access Industries.

On the latest Forbes billionaires list, Russian-born Blavatnik ranked sixth among the top-10 richest New Yorkers, with more than $7 billion to his name.

Bank of America analyst Kevin McCarthy said in a research note that Lyondell produces propylene monomer -- the key building block for Basell's largest product, polypropylene. Both companies make polyethylene, a plastic used in consumer products and packaging. McCarthy said their positions in this market could complement each other.

Blavatnik bought Basell in 2005 for 4.4 billion euros ($5.7 billion) in the largest-ever leveraged buyout in the chemical industry, according to Bank of America.