Bloomberg – Paulson & Co., the hedge fund run by billionaire John Paulson, urged Dow Chemical Co. to slash its dividend, sell new stock and issue bonds to pay for the stalled $15.4 billion takeover of Rohm & Haas Co.

Dow should tap its committed $13 billion bridge loan and $4 billion of equity financing to complete the deal, which was supposed to close Jan. 27, Paulson said today in a statement. Dow could then repay the bridge financing with $4 billion of new equity and $5 billion of new bonds. Paulson, which manages $29 billion, is Rohm & Haas’s second-largest shareholder.

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Reuters – Dow Chemical is scrambling to keep its $15 billion takeover of rival Rohm & Haas alive after a surprise decision by the Kuwaiti government to scrap a joint venture with Dow, the Financial Times reported on Tuesday.

The Kuwaiti decision deprived the U.S. group of about $9 billion in planned financing which it would have used for the Rohm deal, but unidentified people close to the situation told the FT that Dow could still tap a $13 billion bridge loan to pay for the takeover.

The sources also said Dow was likely to try to renegotiate the price of the deal to reflect the recent drop in Rohm’s share price, the newspaper said, adding that both Dow and Rohm declined to comment.

Midland, Michigan-based Dow agreed in July to buy Rohm & Haas for $78 a share to broaden its specialty product offerings. The deal carries a termination fee of $750 million payable to Rohm & Haas.

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