Clariant AG hit a an all-time high Thursday, Oct. 26, amid speculation that its biggest investor has boosted its stake in the Swiss chemicals group as it continues to challenge merger plans with Huntsman Corp. (HUN - Get Report) .

Reuters reported earlier Thursday that White Tale Holdings, an activist hedge fund guided by Keith Meister, has taken its stake in Clariant to more than 20%, up from the 15.1% threshold it disclosed last month.

Clariant shares ended the session 1.6% higher at Sfr25.54 each, just two ticks shy of the lifetime high reached earlier in the session that valued the group at just under Sfr8.5 billion ($8.5 billion).

The stock has gained around 26% since the Huntsman tie-up was first made public in early May, but White Tale wants Clariant's board to review the merger and look for alternative ways to add shareholder value before calling for a vote on the proposed deal.

The increased stake could give White Tale enough power to reject the merger on its own if it were to come to a vote, Reuters suggested, given the two-thirds threshold needed for approval and the fact that only 80% of Clariant's shares would be eligible to vote.

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Clariant officials were not immediately available for comment when contacted outside of regular office hours by TheStreet.

Meister's Corvex Management LP hedge fund, as well as the 40 North Investment group run by David Winter and David Millstone, have used White Tale to disrupt Clariant's $20 billion merger with Huntsman, arguing the deal has "no strategic rationale" and is "a complete reversal of the company's longstanding strategy of becoming a pure-play specialty chemicals company."

"We believe that the proposed merger significantly undervalues Clariant's shares and that far more value could be created for shareholders through any number of alternative transactions," the investors said, in a statement on July 4.

Clariant hit back last month, saying the Huntsman deal is a "continuation" of the pure-play strategy, arguing that "through proactive and consistent portfolio management, Huntsman's portfolio has evolved and is evolving into a primarily specialty chemicals businesses and is, therefore, an excellent match" for the company.

When proposed Clariant/Huntsman deal, led by CEO Hariolf Kottmann, was announced in May, it was described as a merger of equals, although Clariant was in fact acquiring its U.S. peer since the Pratteln, Switzerland-based chemicals maker ended up with 52% of its counterpart from Woodlands, Texas.

But the tie-up was nonetheless seen by some as a potential 'tax inversion', on the part of Huntsman, which would have the global operational hub in the U.S. and provide the CEO of the combined company, while Clariant would take the chairman's role and provide the corporate headquarters.

Switzerland's effective federal corporate tax rate is 7.8%, according to Deloitte, while U.S. rates are banded between 15% and 35%.

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