US Westlake makes $1bn bid to acquire Georgia Gulf

13 January 2012 16:05  [Source: ICIS news]

(recast with production tables)

A Georgia Gulf plantHOUSTON (ICIS)--Westlake Chemical has made a $30/share (€23/share) bid valued at more than $1bn (€780m) to acquire all outstanding shares of Georgia Gulf, the US chemicals firm said on Friday.

Westlake said it first approached Georgia Gulf on 20 September with its proposal.

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,” Westlake added.

Georgia Gulf did not immediately return a call seeking comment.

Georgia Gulf had nearly 34m outstanding shares, according to a regulatory filing made in March, 2011.

Westlake said its bid reflects a 51% premium to Georgia Gulf’s 30-day volume-weighted average share price of $19.82, and a 66% premium to Georgia Gulf’s volume-weighted average closing share price of $18.02 since the initial offer from 20 September.

Georgia Gulf's shares were up $8.81 to $33.29/share at 09:49 hours New York time (14:49 hours GMT).

Westlake, which already holds 4.8% of Georgia Gulf’s shares, said its all-cash proposal is not subject to financing conditions.

Westlake added that it sent on Friday a letter to Georgia Gulf’s board, urging the board “to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal".

“We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders,” said Westlake CEO Albert Chao.

“As such, we are surprised and disappointed that Georgia Gulf’s management has been unwilling to engage in substantive discussions with us,” Chao added.

“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,” the company said.

In its letter, Westlake said it would prefer a negotiated transaction with Georgia Gulf, but stated that making the offer public to Georgia Gulf's shareholders “was now necessary”.

“We have decided to make the terms of our all-cash proposal public. Given the significant premium and near term liquidity, we are confident that Georgia Gulf's stockholders will enthusiastically embrace it,” Westlake said in its letter.

Westlake said it retained Deutsche Bank Securities and Morgan Stanley as its financial advisors.

 

Georgia Gulf and Westlake plant production capacities according to ICIS plants and projects, in tonnes per year.

Georgia Gulf products

 

Westlake products

Product

Combined Capacity

 

Product

Combined Capacity

Polyvinyl chloride

1.02m

 

Polyethylene linear low density

430,000

Ethylene dichloride

1.9m

 

Polyethylene low density

700,000

Cumene

680,000

 

Caustic soda

205,000

methyl styrene

15,000

 

Chlorine

185,000

Acetone

140,000

 

Ethylene

1.3m

Caustic soda

410,000

 

Ethylene dichloride

885,000

Chlorine

365,000

 

Propylene

160,000

Phenol

227,000

 

Vinyl chloride

590,000

Vinyl chloride

725,000

 

Polyvinyl chloride

365,000

 

 

 

Ethylbenzene

205,000

 

 

 

Styrene

259,000

 

 ($1 = €0.78)


By: Stefan Baumgarten
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles