ZURICH (Reuters) - Following a formula pioneered by their corporate raider father-in-law, two men are stirring up the chemicals sector with a push to halt Clariant’s $20 billion merger with Huntsman.

The logo of Swiss specialty chemicals company Clariant is seen at the company's headquarters in Pratteln, Switzerland August 9, 2017. REUTERS/Arnd Wiegmann

Known as the “two Davids”, David Winter and David Millstone are married to Samuel Heyman’s daughters and manage the privately held, multi-billion-dollar business empire he established before he died in 2009.

With investor Keith Meister, their 40 North fund is likely to have already made money on what is now a 10 percent stake in Clariant, with the Swiss group’s shares up 5.6 percent since they came out publicly against the merger on July 3.

Huntsman’s stock is flat since then.

Winter and Millstone have in recent years grown increasingly active with their 40 North fund as well as their roofing materials business, Standard Industries, including several billion-dollar takeovers in Europe in 2016.

Now they are seeking to stir a rebellion among Clariant’s shareholders over a deal they call “value destructive”.

The battle is reminiscent of those waged by Heyman 35 years ago when he fought for control of chemical maker GAF Corp and later Union Carbide and Borg-Warner.

With two-thirds of Clariant shareholders required to approve the merger, Clariant Chief Executive Hariolf Kottmann has hired Goldman Sachs to help him fend off the insurgency.

Kottmann, with the backing of a German investor group with a 14 percent stake, insists no other top investors oppose the Huntsman deal.

Alex Roepers, the 13th-biggest Huntsman shareholder and 20th-biggest Clariant investor, with a stake worth around $200 million, is in favor of it going ahead.

“The idea to bring these two together, and then roll up your sleeves and see what other portfolio moves can be made, makes more sense,” Roepers told Reuters.

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But Winter and Millstone aim to convince other shareholders that Clariant can do better.

While they have not publicly offered alternatives, a person familiar with their talks said one option would be for Clariant to dispose of its plastics and coatings unit, with $2.6 billion in annual sales, to clear the way for selling the full company to a strategic investor.

Those could include Germany’s Evonik, which two years ago held talks with buyout group CVC over a potential joint offer for Clariant, before that fell through.

Kottmann has not ruled out asset disposals, but only after the merger is completed.

Markus Mayer, a chemicals industry analyst at Baader Helvea who dubs Clariant the No. 1 takeover target in the global speciality chemicals industries, told Reuters this week he estimates the merger’s chances at just 50-50.

Huntsman says those opposing the merger are pursuing short-term profit through a break-up of Clariant, in a move similar to when Meister, then a Huntsman shareholder, pushed the Texas-based company to shed its pigments business in 2013.

However, CEO Peter Huntsman, who is slated to become head of the merged companies, instead combined the pigments business with assets he bought from Rockwood and spun them off last week through an initial public offering.

“The parties had a clear difference of opinion on what Huntsman’s pigments strategy should be and Peter’s view has been completely vindicated,” a Huntsman spokesman said.

“The Huntsman/Clariant combination provides even greater potential.”

CLOSE AS BROTHERS

Combining a real-estate fortune inherited from his father and savvy business acumen, Heyman won a $5 billion takeover of chemical maker GAF in 1983 after a proxy fight.

While subsequent hostile bids for Union Carbide and Borg-Warner failed, they made GAF hundreds of millions of dollars.

And late in his career, Heyman amassed a 10 percent stake in the London Stock Exchange when Nasdaq was pursuing a merger.

His sons-in-law have picked up where he left off.

Millstone comes from a family of lawyers and spent time at U.S. investment bank Bear Stearns before taking a role in his father-in-law’s businesses.

Winter, like Heyman, is from a wealthy real-estate family and in a 2015 New York Times interview estimated the clan’s property portfolio at “north of $5 billion”.

They both declined comment on Clariant, but Winter said in the New York Times interview that he and Millstone “are interchangeable” as they work to grow their families’ legacy.

“Having two Davids never hurts. We are as close as brothers,” he added.

(This story corrects spelling of name to Winter)