Meet the Huntsmans

(Fortune Magazine) -- Jon Huntsman Sr., the founder of the $13 billion Huntsman chemical company, sends out a Christmas card every year that has a loyal following among the Utah business community and prominent Republicans. (First Lady Laura Bush starts asking about it months in advance.) That's because this showcase for family values features his nine children, 55 grandchildren, and Mopsy, the family dog. The card comes with a key numbered one to 72, identifying all participants. "And there's still one wife," insists Jon Sr., a Mormon who is aware of what people think of Mormons.

The family may be smiling, but shareholders are not. A private-equity firm, MatlinPatterson, traded roughly $750 million of Huntsman's debt in exchange for a 49% stake in the company back in 2002, when Huntsman was teetering on the verge of bankruptcy.

Since a successful IPO in February 2005, the Huntsman (Charts) stock has dropped 20%. The company has not been profitable in the past five fiscal years and remains saddled with a debt-to-capital ratio of around 70%. In response it has sold its European commodities unit, and it's in the middle of auctioning off its U.S. commodities business. When those sales are finished, the company estimates that debt will be down to about $3 billion and that total revenues will be just under $10 billion.

The stock's torpor is all the more sad considering the company's Horatio Algeresque beginnings. Jon Sr. started the business in 1970, when he was 33 years old, and built it largely from the success of producing the clamshell containers that housed McDonald's (Charts) Big Macs. His eldest, Jon Jr. (No. 1 in the key; second-to-last row, second from left with a green tie), is governor of Utah, and his son Peter (No. 9, to Dad's left) runs the company as CEO.

Jon Sr. has watched the company morph from an old-school U.S. industrial company into a specialized chemical manufacturer with a $1 billion factory in Shanghai. Its biggest business now is polyurethanes, most often used for insulation and other building materials in high demand there.

The Huntsman clan had the chance to walk away from their namesake chemical company last February, when their cash flow made them a buyout target for Apollo Management. The talks broke down over price. Jon Sr. says the company has not been approached by any other buyers since then. MatlinPatterson, which owns 35%, did not return phone calls seeking comment.

The paterfamilias blames the stock's price on the way Wall Street overvalues information companies and undervalues industry. "It's a little disturbing," said Huntsman in Hawaii, where he was on vacation with his family (seven of his children and 33 grandchildren, to be exact). "It's what built this country and made it the powerful nation that it is."