Westlake bids for US chemicals firm Georgia Gulf
Westlake Chemical has submitted an unsolicited proposal to US-based chemicals firm Georgia Gulf to acquire all of the outstanding shares of Georgia Gulf for $30/share in cash.
Westlake said it first approached Georgia Gulf with the proposal on September 20, 2011, but that Georgia Gulf’s management “has been unwilling to engage in substantive discussions”.
The proposal represents a 51% premium to Georgia Gulf’s 30-day volume-weighted average share price of $19.82, Westlake said. The proposal is not subject to a financing condition.
Westlake expects the transaction would be accretive to earnings in the first fiscal year after the close of the transaction, it said.
Westlake also noted that it has acquired shares representing approximately 4.8% of the outstanding common shares of Georgia Gulf.
The combination of Westlake and Georgia Gulf would create one of the leading North American olefins, vinyls, and building products producers, with increased scale in the growing global vinyls market and with additional growth opportunities.
Acquiring Georgia Gulf would enable Westlake to become a leading polyvinyl chloride (PVC) resins producer and vinyl-based building products supplier, and would provide Westlake with opportunities to expand its global product offerings, it said.
“We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders,” said Albert Chao, Westlake CEO. “As such, we are surprised and disappointed that Georgia Gulf’s management has been unwilling to engage in substantive discussions with us.
“Since the initial delivery of our proposal on September 20, 2011, we have made numerous attempts to engage in meaningful dialogue with Georgia Gulf and have expressed our willingness to explore, pursuant to a customary confidentiality agreement, whether opportunities exist that would justify increasing our proposal price,” Chao continued.
“However, Georgia Gulf has been unwilling to provide us with information that would allow us to explore these opportunities or to enter into substantive discussions.
“We urge the Georgia Gulf board to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal.”
Georgia Gulf’s production range includes basic chemicals, vinyls, polymers and fabricated PVC products.
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